Do you know your score? How positive data could impact your next credit application
Do you know your credit score? Do you know it may have changed recently as a result of comprehensive credit reporting (CCR)?
Three in five Australians are unaware their credit score may already have changed since banks started sharing positive customer data, in line with the legislation proposed by former Treasurer Scott Morrison. As lenders increasingly take into account your available repayment history when deciding whether or not to approve your credit application, it’s important to be aware of your credit score and how you can proactively manage it so that you can potentially access more competitive deals and interest rates.
Are Australians aware of the change?
To explore how well Australians understand the new positive data sharing, also known as CCR, we conducted large-scale research in 2017 and again in 2018 to see how local perceptions have changed.
An overwhelming 60% of respondents still don’t know that credit providers are sharing more of their personal financial data, let alone how this impacts their credit score. Also 65% of Australians have never checked their credit score. With 50% of rich customer credit data from big four banks being shared with credit bureaus, along with smaller lenders also voluntarily sharing holistic datasets, more than ever before your financial history counts when you apply for credit.
When asked if they were aware credit providers in Australia were planning to share more of their personal financial data:
Big four customers were
Those with multiple accounts across multiple credit providers were not aware.
Non-big four customers
were not aware.
Despite improvements since research in March 2017, misconceptions remain rife. When asked in April this year what financial activities Australian’s think improves their
- Option 1
- Option 2
- Option 3
- Incorrectly believe paying their utility bills on time improves their score
(slightly worse from 2017 at 86%)
- Incorrectly believe having high value assets improves their score
(an improvement from 26% in 2017)
- Incorrectly believe getting a pay rise improves their score
(an improvement from 19% in 2017)
More generally, credit score awareness across Australia continues to improve, but
of people have still never checked their credit score
(an improvement from 71% in 2017).
Of big four bank customers have checked their credit score before.
Of multiple account holders across multiple lenders have ever checked their score.
Of non-big four customers have checked their credit score.
Don't know how to (an improvement from 32% in 2017).
Don't know what a credit score is (an improvement from 24% in 2017).
Haven't got around to it yet (same as 2017).
Although positive data sharing has already begun infiltrating the market, a whopping 60% of consumers surveyed are not aware that credit providers were planning to share more of their personal financial data:
Being aware of what your credit score is, and how your financial decisions impact your credit report, is vital for successful credit application outcomes for all Australians.
What should you do now?
Here are 3 core ways to look after your credit:
Make payments reliably - Look after your future credit score now by diligently making mortgage, loan and credit card repayments when they’re due
Regularly check your credit report - As new data is factored into credit reports, now is an even better time to regularly check the information on your credit file to make sure it’s correct. You can do this any time free of charge with Experian or by creating a free credit profile with Experian partners like creditsavvy.com.au that can help monitor your Experian credit score and credit file information
Avoid multiple late payments – Consecutive late payments and paying bills significantly late to the point where debt collection agencies are engaged can negatively impact your credit rating
To learn more about your credit score and how positive data reporting can impact your next credit application, download our whitepaper. You can also learn more about credit reports, credit scores and how to look after your credit health in our Education Hub.
Another great resource is the Australian Retail Credit Association (ARCA) CreditSmart website, created and supported by credit experts to help you understand how recent credit reporting reforms affect you, how your credit choices affect the information that credit providers can access and how you can view and control that information.
About the research: Survey conducted via Pure Profile in April 2018 using online surveys. The survey was completed by 1,011 Australians representative of the nation as a whole aged 18 and over.
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