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

16 ASX stocks to buy and hold forever, updated

This time last year, I highlighted 16 ASX stocks that investors could own indefinitely. One year on, I look at whether there should be any changes to the list of stocks as well as which companies are worth buying now. 

2025-26 super thresholds – key changes and implications

The ABS recently released figures which are used to determine key superannuation rates and thresholds that will apply from 1 July 2025. This outlines the rates and thresholds that are changing and those that aren’t.  

Is Gen X ready for retirement?

With the arrival of the new year, the first members of ‘Generation X’ turned 60, marking the start of the MTV generation’s collective journey towards retirement. Are Gen Xers and our retirement system ready for the transition?

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

What Warren Buffett isn’t saying speaks volumes

Warren Buffett's annual shareholder letter has been fixture for avid investors for decades. In his latest letter, Buffett is reticent on many key topics, but his actions rather than words are sending clear signals to investors.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

Latest Updates

World's largest asset manager wants to revolutionise your portfolio

Larry Fink is one of the smartest people in the finance industry. In his latest shareholder letter, the Blackrock CEO outlines his quest to become the biggest player in private assets and upend investor portfolios.

Economy

Australia's economic report card heading into the polls

Our economy grew by a nominal rate of 7% per annum from 2017 to 2024, but it benefited from the largesse of fiscal and monetary policies, both of which are now fading. We need a new, credible economic growth agenda.

Preference votes matter

If the recent polls are anything to go by, we are headed for a hung parliament at the upcoming federal election. So more than ever, Australians need to give serious consideration to their preference votes.

SMSF strategies

Meg on SMSFs: Tips for the last member standing

It’s common for people as they age to seek more help in running their SMSF if their capacity declines. An alternate director may be a great solution for someone just planning for short-term help in the meantime.

Wilson Asset Management on markets and its new income fund

In this interview, Matthew Haupt from Wilson Asset Management discusses his outloook for the ASX, sectors such as REITs that he likes, and his firm's launch of a new income-oriented listed investment company.  

Planning

‘Life expectancy’ – and why I don’t like the expression

Life expectancy isn't just a number - it's a concept that changes with survival rates over time. This article breaks down how age, survival, and societal factors shape our understanding of life expectancy, especially post-Covid. 

The shine is back on gold, and gold miners

Gold mining stocks outperformed in 2024 and are expected to do well in 2025. At this point in the rally, it's worth considering what has driven gold prices higher and why miners could still have some catching up to do.

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.