How CCR is transforming the way brokers do business
In 2014, Australia began the process of transitioning from a negative credit reporting system to one that includes Comprehensive Credit Reporting (CCR) data. In 2018 the transition to CCR has become a reality, with major lenders such as NAB and HSBC beginning to share and consume data. When paired with adverse information, CCR data provides a more accurate and holistic view of an individual's creditworthiness, leading to more informed credit decisions.
For brokers, this information can provide insight into an individual's indebtedness, their willingness or ability to repay and their credit account history. Those that meet the definition of an access seeker (as defined by the Privacy Act) do not need to supply CCR data in order to consume it; this means that as comprehensive data begins to be shared by the major banks and other credit providers, the data will be available for brokers to view in an individual's credit file.
Positive data provides additional insights
CCR data will reveal a whole lot more for brokers, impacting the way they engage and service their customers.
Account Open Date: This shows all of the individual's open credit accounts, and the age of those accounts.
Account Closed Date: This can become a record of accounts responsibly managed but no longer open (information kept on file for 24 months).
Type of Credit: By viewing the type of credit that an individual has (e.g. credit card, personal loan, mortgage), you can see their risk appetite and ability to get mainstream credit.
Credit Limit (Maximum amount of credit available): Listing all credit limits shows potential exposure and may impact serviceability. You are also able to view the original credit limit if the individual has added more debt to the account.
Monthly Repayment History Information (for 24 months): By providing an account repayment status in a given month, repayment history information shows an individual's ability to repay, and potential to self-cure after being impacted by a negative credit event.
Why is an individual's repayment history important?
Repayment history can be a key indicator of an individual's risk; it makes it easier for individuals to show that they have recovered and stabilised after a negative credit event such as a default. It also gives a more complete view of an individual's creditworthiness, and can be leveraged by both the individual and by brokers to get a better deal when applying for a loan.
How will comprehensive data impact your business?
With more information, you're likely to be able to better assess an individual's credit risk and financial position. This will enable you to choose the right loan and lender for your customers, reducing loan application processing time and costs and improving the customer experience.