Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 114

The importance of your personal credit report

In March 2014, changes were made to Australia’s credit reporting system, paving the way towards the introduction of comprehensive credit reporting (CCR). It is important for everyone to understand what impact the information on their credit report may have on their financial situation.

Based on interactions with the negative reporting system, many financial professionals consider credit reporting of relevance to a niche market. Clients seen as more financially literate or well-off, and therefore unlikely to have damaging information on their credit report, are often overlooked when it comes to credit education. 

Credit reporting is relevant to everyone

With the introduction of CCR, understanding the system will become more important than ever for all Australians. Credit reports will progressively include a wider range of information about a consumer’s credit products and whether payments are being made on time, as well as the negative information which was previously available.

Traditionally, most consumers in Australia only became aware of their credit record when they were declined credit, perhaps because of a default on their credit report. Based on overseas experiences, such as in the US, UK and South America, we expect this to change. We anticipate that consumers will increasingly see the new credit reports, and potentially their credit scores, as evidence of good personal financial management. They may also be used as a tool to seek out better interest rates and terms with lenders.

Financial professionals, including planners and accountants, are in an ideal position to help consumers understand and take control of their credit reports, so that when they need credit, their creditworthiness is assessed accurately.

Key rights under Australian law include:

  • The right to a free copy of your credit report annually from each of the credit reporting bodies. If a credit application is rejected, you are entitled to request another free credit report.
  • The right to challenge and fix errors on your report, which credit providers and credit reporting bodies must investigate and correct free of charge.
  • The right to escalate a complaint to an external dispute resolution service such as the Credit and Insurance Ombudsman or the Financial Ombudsman Service if unsatisfied with the investigation.
  • The right to have a ban placed on your credit file to protect the credit file being accessed in cases of suspected identity theft.

Good reports can lead to better outcomes

Understanding what information is held on a consumer’s credit report can provide a pathway for negotiating better payment or credit terms, or allow financial advisers to provide advice about what steps a client can take to improve their payment behaviour.

From a business productivity perspective, richer data may also result in higher approvals and easier loan take-up, due to more efficient and accurate matching of the right finance offer for each client. The reforms are designed to improve not only the credit reporting system and the availability of credit to rehabilitated borrowers, but also Australia’s overall financial stability through prudent risk assessment.

 

Damian Paull is Chief Executive of ARCA, the peak body for retail credit providers and credit reporting bodies. For industry, ARCA hosts a number of events and seminars, and for consumers, there is an educational website at www.creditsmart.org.au.

 


 

Leave a Comment:

RELATED ARTICLES

6 ways to manage investment property loan serviceability

banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Welcome to Firstlinks Edition 627 with weekend update

This week, I got the news that my mother has dementia. It came shortly after my father received the same diagnosis. This is a meditation on getting old and my regrets in not getting my parents’ affairs in order sooner.

  • 4 September 2025

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

Super crosses the retirement Rubicon

Australia's superannuation system faces a 'Rubicon' moment, a turning point where the focus is shifting from accumulation phase to retirement readiness, but unfortunately, many funds are not rising to the challenge.

Latest Updates

Investment strategies

Why I dislike dividend stocks

If you need income then buying dividend stocks makes perfect sense. But if you don’t then it makes little sense because it’s likely to limit building real wealth. Here’s what you should do instead.

Superannuation

Meg on SMSFs: Indexation of Division 296 tax isn't enough

Labor is reviewing the $3 million super tax's most contentious aspects: lack of indexation and the tax on unrealised gains. Those fighting for change shouldn’t just settle for indexation of the threshold.

Shares

Will ASX dividends rise over the next 12 months?

Market forecasts for ASX dividend yields are at a 30-year low amid fears about the economy and the capacity for banks and resource companies to pay higher dividends. This pessimism seems overdone.

Shares

Expensive market valuations may make sense

World share markets seem toppy at first glance, though digging deeper reveals important nuances. While the top 2% of stocks are pricey, they're also growing faster, and the remaining 98% are inexpensive versus history.

Fixed interest

The end of the strong US dollar cycle

The US dollar’s overvaluation, weaker fundamentals, and crowded positioning point to further downside. Diversifying into non-US equities and emerging market debt may offer opportunities for global investors.

Investment strategies

Today’s case for floating rate notes

Market volatility and uncertainty in 2025 prompt the need for a diversified portfolio. Floating Rate Notes offer stability, income, and protection against interest rate risks, making them a valuable investment option.

Strategy

Breaking down recent footy finals by the numbers

In a first, 2025 saw AFL and NRL minor premiers both go out in straight sets. AFL data suggests the pre-finals bye is weakening the stranglehold of top-4 sides more than ever before.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.