Comprehensive credit reporting is a system which includes both positive and negative information on a person’s credit file, to make credit reports fairer and more accurate.

Under the previous system, credit providers only saw negative information about potential borrowers. This meant a one-off money mistake could risk torpedoing your credit score, with no easy way to recover. This made it harder for some Australians to access credit and borrow money.

As of March 2014, credit providers were also able to supply positive information, such as when customers make repayments on time and pay off their loans. On 1 July 2018, it became compulsory for the big four banks (ANZ, Commonwealth Bank, NAB and Westpac) to participate. Comprehensive credit reporting was made mandatory in Australia on 1 July 2019.

Seeing both positive and negative information lets credit providers more easily determine how a potential borrower manages money. Comprehensive credit reporting can also allow someone with bad credit to gradually improve their credit score over time through a consistent pattern of positive credit behaviour. 

What information is recorded in your credit file?

According to Equifax, this is how long positive and negative events may appear on your credit report:

Positive events

  • Active accounts paid as agreed – will remain on report if the account is open, such as repaying a mortgage, and the lender is reporting it.
  • Closed accounts paid as agreed – may stay on your report for up to 10 years.

Negative events

  • Hard enquiries into your credit report – up to 2 years.
  • Late repayments – may last up to 7 years.
  • Collection or charged-off accounts - may last up to 7 years.
  • Bankruptcy – may last from 7 – 10 years.
  • Other events, including repossession and foreclosures – up to 7 years.

How does comprehensive credit reporting affect credit scores?

When you apply for a mortgage or a credit card or an electricity account, the provider conducts a credit check to assess how likely you are to repay any money they might lend you. 

This credit check involves asking a credit bureau for a copy of your credit file, which details any credit accounts you hold and credit applications you’ve made. In the past, these credit files contained only negative information, such as missed repayments and defaults, so they provided only a limited insight into your ability to manage loans. Under comprehensive credit reporting, these credit files now include positive information as well, which means they can provide a more accurate assessment of your credit history.

Your credit history is used to generate your credit score, which is a number summarising your record of managing money. A high credit score indicates that you’re a responsible borrower, and credit providers are more likely to extend you credit and give you better deals. But a low credit score means that credit providers may charge you higher interest rates and fees or decline your credit application altogether.

You can check your credit score for free to get a better idea of how lenders see you before you apply for a credit product, such as a personal loan, car loan or credit card. This could help you determine if you’re likely to qualify for some of the best deals, or if you’ll need to take some steps to improve your credit score before applying.