There is a clear link between credit reporting and increasing credit accessibility, according to the head of a credit association.
It is three months since comprehensive credit reporting (CCR) went live in Australia, and the Australian Retail Credit Association (ARCA) said it intends to keep reinforcing the “critical role” CCR plays in contributing to the robustness of Australia’s $1.49 trillion retail credit industry and reducing financial exclusion.
ARCA CEO Damian Paull told Informa’s inaugural Privacy Reform in Credit Reporting Forum in Sydney yesterday that there was a clear link between credit reporting and increasing credit accessibility.
“Global studies show comprehensive credit reporting can be used as a tool to increase credit access and stimulate growth. CCR is also a key component of financial inclusion by increasing the pool of eligible consumers who can responsibly access credit to buy essential goods or services that are beyond the monthly household budget, such as vehicles and furniture,” he said.
ARCA is trying to place credit reporting education on the financial literacy agenda. Earlier in the year it launched education site CreditSmart
to give consumers and finance professionals more detailed information on the credit reporting laws and how to access credit reports.
“The World Bank quite rightly states that credit reporting is a vital part of a country’s financial infrastructure and is an activity of public interest. While it’s still early days for comprehensive credit reporting in Australia, some consumers still don’t realise they are entitled to a free credit report every year, or what the new credit reporting environment means for them,” Paull said.
“Change isn’t going to happen overnight but clearly more needs to be done in placing credit reporting more firmly on the financial literacy agenda.”