Australians Could Soon Get Really Cheap Credit if Credit Report Reforms Adopted

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If credit report reforms outlined by the Australian Law Reform Commission are adopted by the Australian government, consumers could see cheap credit in future.

This is proven to be the most valuable data for spotting consumers falling into financial difficulty, and without it, lenders cannot lend as responsibly as they could.

Australians could be set to get cheap credit if the credit report reforms proposed by the ALRC are acted upon by the Commonwealth Government, says independent credit checking website, checkmyfile.

Experts at checkmyfile, Australia's online credit checking website, believe if consumer credit payment records are shared with Australia's credit agencies, not only will this bring down the cost of Australian credit to UK and US levels but also ensure injudicious lending is controlled properly.

Barry Stamp of checkmyfile says: "Australian consumers have been paying much more for their credit than UK and US consumers. This will hopefully become a thing of the past if the current credit report proposals set out by the ALRC are acted upon quickly.

The ALRC is backing an increase in the type of data lenders can share with the credit reference agencies, and have backed the sharing of consumer payment performance data. "This is proven to be the most valuable data for spotting consumers falling into financial difficulty, and without it, lenders cannot lend as responsibly as they could."

Stamp adds: "It is a ludicrous claim by some commentators that giving lenders access to more comprehensive credit report data will lead to reckless lending.

"To drive down the cost of credit, legislators need to allow lenders to share credit payment performance data with the credit reference agencies. Better credit report data means sharper lending decisions, which helps reduce the extensive costs of debt collecting, which cuts dramatically the cost of credit ".

Checkmyfile has no doubt that sharing more credit report information about consumers is good for consumers. From its experience in the UK, where it has been providing online credit reports to consumers since 2000, and where 'positive' credit reporting is accepted as the norm by both lenders and consumers.

Even the ALRC proposals would leave the Australian credit report system trailing the UK, which has seen an expansion in the information shared with the credit reference agencies. Recent behavioural changes, which include records of cash machine withdrawals and minimum payments being made, have been supported by UK consumer groups as a positive step to combat consumer over-indebtedness, as they are considered warning signs of over-indebtedness.

"At the moment, Australian lenders and consumers are flying blind, comparatively speaking," concludes Stamp.

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Richard Goedegebuur
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