The imminent introduction of positive credit reporting in Australia has been heralded by industry professionals as a way to ensure responsible lending.
Under the current law, only negative credit activity is recorded on an individual’s credit file. Such activity includes loan defaults, payment enquiries and failed credit applications.
However, draft legislation will be introduced in the coming months to allow ‘positive’ credit reporting, and is expected to be implemented in 2011.
Credit reporting bureau Veda Advantage spokesperson Chris Gration told Mortgage Business that Australia had fallen behind the rest of the world when it came to positive credit reporting.
“Positive credit reporting is a worldwide practice. Australia is one of only three countries yet to implement it – the other two are France and New Zealand, but New Zealand already has plans underway,” he said.
According to Mr Gration, the proposed changes came about in response to an inquiry conducted by the Australian Law Reform Commission between 2006 and 2008.