Arca warns Australia's credit reporting system is "falling dangerously behind"

Australia’s peak credit reporting association has urged the government to modernise the country’s credit reporting framework, warning that outdated systems are stifling productivity and limiting competition in lending. 

“Australia's credit reporting system is outdated and limited compared to other developed nations,” said Elsa Markula (pictured), CEO of Arca.  

“Modernising credit reporting represents a significant opportunity to boost productivity through better data access and streamlined lending processes, yet we’re falling behind our international counterparts.” 

Arca has made its case in a submission to the Economic Reform Roundtable, which began in Canberra on Aug. 18 and brought together leaders from business, unions, civil society and government to shape policies on productivity, resilience, and fiscal sustainability. 

Priority reforms outlined 

The submission outlines three reforms Arca says would align Australia with global best practice: 

• Enhanced data inclusion – Expanding credit reporting to include richer repayment data and account balances to strengthen lending decisions. Research shows 60% of consumers support easier and faster loan application processes. 
• Fraud prevention improvements – Replacing the current consumer ban system with a more sophisticated fraud flag approach to better protect borrowers. 
• Small business support – Establishing a government-industry working group to explore SME credit reporting, supporting the 7.4 million Australians employed by small businesses contributing $700 billion to the economy. 

Criticism of recent review 

Arca also strongly criticised the independent Review of Australia’s Credit Reporting Framework, warning its recommendations would hinder productivity. 

“If implemented, the independent review's recommendations would miss critical opportunities for productivity gains,” Markula said.  

“Rather than restricting credit reporting, we should be focusing on catching up to global standards and unlocking the economic benefits that come with a modern, comprehensive credit reporting framework.” 

Benefits for lenders, brokers, and consumers 

Markula stressed that reform would have broad benefits across the financial system, from lenders and brokers to consumers. 

“These reforms aren't just about improving efficiency for lenders – they’re about creating a system that works better for all Australians,” she said. “A modernised credit reporting system would support financial inclusion, help consumers access credit on more competitive terms, and contribute to overall economic resilience.” 

Arca represents 95% of all consumer lending in Australia, with members including 14 of the nation’s largest banks, mutual banks, consumer finance firms, fintechs, and credit reporting bodies. 

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