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Nearly two-thirds of young Australians do not understand the term “credit report” and are not aware of comprehensive credit reporting changes, a recent report has revealed.
The Take Charge: Credit Reporting and Millennials report, commissioned by the Customer Owned Banking Association (COBA) and released this week by Good Shepherd Microfinance, has revealed that - of the younger Australians aged 18 to 34 polled - 64 per cent had not heard of and did nor did they understand the term “credit report”.
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Nearly three-quarters (73 per cent) were also unaware of the changes to comprehensive credit reporting (CCR), which allows lenders to report additional information about borrowers, including repayment history, such as whether a borrower has paid all credit obligations in a given month (and whether payment was on time, late or missed).
However, despite many not knowing the details of credit reporting, the vast majority (72 per cent) of respondents said they liked the idea of getting a better deal because of a positive score, and more than half were worried about missing out on a good deal if they had a bad credit report.
Around half of respondents said that they were going to make more effort managing their finances because they could see the importance of their credit file in the future, while 58 per cent were willing to learn more about CCR and find out their credit score.
COBA CEO Mark Degotardi commented: “[The] research indicates that for younger Australians comprehensive credit reporting wasn’t a burning issue but once they learnt more, they saw the benefits of this system and in many cases resolved to make positive changes.”
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[Related: Alarming default rates identified in new report]
