Online lender RateSetter is calling on brokers to help combat misunderstanding and fear about changes to comprehensive credit reporting.
The call comes after new research reveals that just one-third of people have any knowledge of the impending changes to the way credit information is shared.
RateSetter surveyed 1,000 Australian consumers earlier this year and found that 29 per cent of people believe that the comprehensive credit reporting (CCR) changes will affect the way they approach and manage their finances by way of positive behavioural changes such as making payments on time and paying more than the minimum amount on their credit card.
NAB became the first major bank to begin utilising CCR, and the group announced last week that it will be rolling out the new system for personal loans, credit cards and overdrafts.
“Although it took mandatory regulation to bring the big four to the party, we applaud NAB for this week being the first of their peers to take the leap into CCR,” RateSetter CEO Dan Foggo said.
“Now the job of the government and the financial services industry is to communicate the benefits of CCR so people are encouraged to shop around for a better deal on borrowing.
“We believe that brokers have a key role to play in this education process.”
However, FBAA’s Peter White recently warned that CCR requirements, which were mandated by Treasurer Scott Morrison last year, could leave borrowers worse off.
Mr White believes that if the CCR changes are introduced, lenders would not provide rate reprieves for borrowers with a positive credit history, and these changes could punish borrowers that have experienced financial difficulties in the past.
“What will happen is that banks will maintain their current interest rate margins for customers with a better credit file, and increase the rates for those who have been through past difficulties under the guise of being of lesser quality or higher risk,” Mr White said.
“This normally impacts those who can least afford to pay higher interest rates, so it exacerbates their problems and helps no one.”
[Related: CCR a ‘game changer’ for mortgages]