Lenders will soon be able to assess more of their clients’ credit history than previously, following last year’s changes to the Privacy Act.
Changes introduced in March last year now allow more detailed information to be recorded.
Lenders should soon be able to see more of a borrower’s “good behaviour” show up in credit applications, as opposed to only negative credit history such as defaults and bankruptcies.
Most of Australia’s lenders have agreed to implement the new system over the coming months, which will assist them to make better lending decisions.
Those who have adapted to the change already are able to collect and share individuals’ positive credit information, including the date the account was opened, if it was approved or declined, the type of credit and what the limit is, along with two years of month-by-month minimum repayment history.
“While some might be nervous about this new level of information, we don’t believe that this change is necessarily a bad thing,” Smartline executive director, Joe Sirianni, said.
“It’s likely that we will start to see situations where clients with good credit ratings will be offered a better deal,” he said. “People will be able to recover faster from financial adversity and it will be quicker to establish a credit report.”
Prior to the Privacy Act changes, lenders could only view a customer’s defaults, insolvency history and credit applications, though they were not able to tell if the application was approved or declined.