After a decade-long journey, the most significant reform to the Australian consumer credit industry in 25 years – a new comprehensive credit reporting (CCR) environment – began this month.
Nerida Caesar, Veda’s Chief Executive Officer, said today’s milestone marked the beginning of a long-term journey for the credit and banking industry. “CCR is a game-changer for the credit industry. Finally Australia is coming into line with other developed economies, including the US, UK and most of Western Europe. “The amended Privacy Act and the new Credit Reporting Code agreed at the close of 2013 is a massive leap forward for Australia, striking a good balance between the rights of consumers and the integrity and accuracy of the credit reporting system,” Ms Caesar said. “Veda has been at the forefront of the industry drive for change towards positive credit reporting. Not only have we worked at an industry level on the reforms, we have launched our VedaScore ranking – a personal credit score offering that helps consumers understand how they are viewed by lenders.”
Ms Caesar said while the reform has been mooted for some years, credit providers were working rigorously to implement operational changes within their organisations ahead of the change, which will transform the credit landscape.
David Grafton, Veda’s Executive General Manager – Credit Risk & Advisory Services, said it would take time to transition to the new system. Among the challenges for credit providers was the need to adapt their business practices and decisioning processes to meet the new requirements, he said.
“CCR promotes responsible lending by providing a more complete picture of a consumer’s credit activity. Industry will benefit from a more accurate view of risk, but in turn, credit providers will need to take steps to ensure data they share meets new requirements for compliance, like improved measures for consumers to correct information held about them.”
For the first time, credit providers will be able to see data such as the type and amount of credit a person has applied for, when credit accounts are open and closed and whether monthly repayments are paid on time. Over time, they will be able to view 24 months of repayment history on credit accounts.
Mr Grafton said Veda was well positioned for this transition to positive credit reporting, having drawn on insights gained from customers, a simulated CCR pilot study, as well as its international experience.
Source: Veda Press Release