Call for modernised credit reporting as Financial Inclusion Week begins

As Financial Inclusion Week begins, Arca calls for credit reporting reform, citing outdated rules that hinder fair access and noting household wealth gains haven’t eased affordability pressures.

With Financial Inclusion Week now underway (Oct. 6–9), industry leaders are renewing calls to reform Australia’s credit reporting system, warning that outdated frameworks are holding back lenders, brokers, and consumers.

The system is seen as a particular obstacle for young Australians, new migrants, and those rebuilding their financial wellbeing. As cost-of-living pressures drive more people to seek credit, advisers say fairer and smarter reporting is essential to ensure responsible lending while keeping access open.

The urgency of reform was underscored at a recent Economic Reform Roundtable in Canberra, where Arca argued that Australia’s credit reporting system is “outdated and limited compared to other developed nations.”

“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 CEO Elsa Markula (pictured) said.

Key findings highlight consumer challenges

New research from Arca shows:

• Nearly half of Australians remain uneasy about how their credit data is shared.
• One in five borrowers in hardship avoided seeking support from their lender for fear of damaging their credit report.
• More than half of Australians who missed a credit repayment said everyday financial pressures were the cause.

“Modernising credit reporting can give Australians fairer opportunities to access mainstream credit while ensuring brokers and lenders have the tools they need to uphold responsible lending,” Markula said.

Priority reforms on the table

In its submission to the roundtable, Arca outlined three urgent reforms:

• Expanding data inclusion to cover richer repayment histories and account balances.
• Replacing the outdated consumer ban system with a fraud flag to improve borrower protection.
• Establishing a joint government-industry working group to explore SME credit reporting, supporting small business lending.

Markula also warned that the independent Review of Australia’s Credit Reporting Framework risks missing the mark.

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

Broker takeaway

For mortgage advisers, the debate goes beyond compliance. Better data could reduce friction in loan assessments, broaden access for underserved groups, and strengthen trust in the lending process.

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

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