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Michael Blyth
Head of Government, Regulatory & Industry Affairs
14 May 2018

Almost everyone will, at some point, use credit, whether it be taking out a mortgage to buy a home or using a credit card to pay for a new TV.

Even dedicated savers – who squirrel away enough funds to pay for products upfront and would never dream of borrowing money from a bank - have probably used credit at some point.

This is because ‘credit’ includes more than just credit cards, home loans and personal loans you get from a bank. Credit is any arrangement where you owe a debt to a business and they agree to get paid sometime later. This includes your phone or utility account where you use the service and pay the bill at the end of the month or quarter.

If you ask a business to give you ‘credit’, the business may obtain a ‘credit report’ about you from a credit reporting body to help them work out if you’ll pay back what you owe. A credit report is a record of how you’ve handled loans and debts with other businesses before.

If the credit report makes you look good, you’ll find getting a loan or buying something on credit is easier; you may even be able to get a better interest rate.

Credit reporting in Australia is changing. Currently lenders only see ‘negative’ information about you, such as whether you’ve defaulted on a loan. Soon there will be more information on your credit report which, if managed well, will help you look good to lenders.


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