A non-major lender has tightened its loan application process, requiring a more detailed assessment of a borrower’s credit file before formal approval of a loan application.
Bluebay Home Loans has informed brokers that it will require the outcome of all credit enquiries listed on a borrower’s file before approving loan applications as it transitions to the Comprehensive Credit Reporting (CCR) regime.
The lender noted that the industry has commenced implementation of the mandatory CCR regime, which will see lenders making more data available on facilities held by an individual within their credit file but requires credit enquiries to be formally processed during the transition.
“We are currently in a transition period where not all institutions have implemented these new reporting requirements,” Bluebay stated.
“Please be advised that effective immediately, to further assist our review of an applicant’s credit profile prior to any loan approval, we will require the outcome of all credit enquiries listed on an applicant’s credit file.
“In the future, many of these explanations will be evident from the information contained within the actual credit file itself as more lenders introduce the new reporting requirements.”
Bluebay added that the change is effective for all loans not yet formally approved, stating that it will approach brokers for any pipeline applications where additional enquiries may need to be queried.
The federal government introduced the mandatory CCR regime in its National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Regulations 2018.
The legislation will amend the Credit Act to mandate that lenders share comprehensive credit information with credit reporting bodies. A voluntary regime of a similar kind has been in place since March 2014; however, low levels of participation have led the government to mandate it.
The CCR regime will require the four largest banks to supply 50 per cent of their active and open credit accounts by 28 September 2018. The information on the remaining open and active credit accounts, including those that open after 1 July 2018, will need to be supplied by 28 September 2019.
[Related: FHBs to benefit most from CCR]
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