The time is approaching – as of July 2019, soon all lending institutions will have more detailed information on how you use and manage your credit as all of the big banks will deliver 100% of their credit data to credit bureaus. But don’t panic, there isn’t anything you need to do, just things to be aware of. Here are five things you need to know before the update:

1. What is your credit report and credit score/rating

A credit report is essentially a snapshot of how you have used (and are using) credit, compiled by Credit Reporting Bodies (CBRs). Your credit score is a number assigned to you based on this report, and indicates to financial institutions the level of risk involved in providing you with new lines of credit.

2. Your credit report will soon move to ‘positive’ reporting

Your credit report will now contain more comprehensive information about how you use and manage credit.

This new information includes:

• Number and type of credit lines you have held over the past two years, including credit cards, home loans and personal loans • Repayment history, including the amount and frequency, and if you made repayments by the due date • Dates you opened and closed credit accounts, and their limits • When and with what financial institutions you have applied for credit

Previously, your credit report was weighted toward negative credit behaviours, such as defaults and bankruptcies. The new information will make it more obvious if you manage credit well.

3. Changes will create greater transparency and control

Comprehensive reporting will mean that lenders will have more information about your credit use – and so will you. For example, it will be easier to spot any errors or suspected cases of identity fraud.

Both lenders and credit reporting services are required to correct any wrong information within set time frames. If your problem isn’t addressed in a satisfactory way, you can complain directly to the Office of the Australian Information Commissioner – an independent government agency.

4. You’ll probably see more market competition

More information shared between lenders could result in benefits for you. This is because it’ll be easier for lenders to understand your credit history and financial position, and your level of risk. They are more likely to provide credit deals and could offer better rates if your credit score is high, in order to out-bid the rest of the market for your business.

5. July 2019 is the deadline for the big 4 banks

While including additional information about your credit history in reporting was once optional, in 2017 the Australian Government announced it would be mandating CCR. Financial institutions were required to have at least 50% of their positive consumer credit data “ready” for credit reporting by July 2018, with the rest of the data due by July 2019. With the deadline now in sight, it’s a good time to ensure your credit score is healthy.

It’s a good time to make sure your repayments are made on time – consider setting up direct debits or payment reminders in your calendar – and order a free credit report to check for any errors.

Have you checked your credit score recently? Share your experiences in the comments section below.