When you borrow money these days, you need to be aware that the new ‘comprehensive credit reporting’ system will be recording positive aspects about your payment history as well as any negatives.

The new system that came into effect on March 12, 2014 records more detailed information about your history of credit card and mortgage repayments.

The change brings Australia into line with systems used by many countries around the world, including the United States and United Kingdom.

Lenders and credit reporting groups say the changes to credit reporting will benefit potential borrowers by showing a complete, “positive” credit history rather than just negative events such as defaults.


There have, however, been some concerns expressed that records of missed monthly payments will disadvantage people, making credit more expensive for them in the future.

The concern is that people who have had repayment difficulties may have to pay a higher interest rate for future loans.

The Australian Retail Credit Association (ARCA), which represents credit providers and credit reporting bodies, says making more information available to lenders will help consumers because payment history will give lenders a better picture of a person’s capacity to pay for a new loan.

It will allow lenders to offer lower interest rates to people with a good credit record.

Banking and finance ombudsman, Philip Field, has been reported as saying the new system may be good or bad depending on your perspective. He emphasised it was important for people to understand what their credit report contains and how to manage it properly.

From MKG Accounting’s perspective we would like to emphasise that if you believe you’re headed for a financially difficult time, seek help such as refinancing or at the very minimum discuss the problem with a financial advisor or the financier before you’re unable to make loan payments.

Sometimes simply restructuring your borrowings may be the solution to the problem.