A new report has revealed that Australia’s comprehensive credit reporting (CCR) framework has delivered faster, cheaper, and safer lending for millions of consumers, but warns the system must evolve to remain globally competitive.
Data from Arca’s latest report shows that more than half of consumers are seen as a lower credit risk once lenders factor in comprehensive data, with one lender finding that this process would have allowed them to approve 90% of previously rejected applications without increasing defaults.
The report, Comprehensive Credit Reporting in Australia: Usage and Benefits, reveals that 92 credit providers are now participating in the system, covering more than 22 million consumer accounts and accounting for the vast majority of the regulated market. It confirms that widespread use of CCR, which includes both positive and negative credit data, has significantly improved credit scoring, financial inclusion and competition.
Key findings include:
- Credit scores using comprehensive data are 14–39% more predictive across mortgages, auto loans, personal loans and credit cards.
- More than half of consumers are seen as lower credit risk once comprehensive data is included.
- One lender could have safely approved 90% of previously rejected applicants, with no increase in defaults.
- Another lender saw a 6% increase in personal loan and credit card approvals, without higher risk.
- Application times halved at one major lender, from 4.9 to 1.9 days.
- Smaller lenders that adopted CCR doubled applications and reduced losses by 25%.
Despite the clear benefits, Arca says Australia’s credit reporting framework is being held back by outdated restrictions, suggesting that targeted reforms are needed to realise its full potential and keep pace with international markets.
“Comprehensive credit reporting has already made lending faster, cheaper and fairer for millions of Australians,” said Elsa Markula (pictured), CEO of ARCA.
“But outdated restrictions on the type of data that can be shared mean we’re falling behind markets like the UK, US and Canada. This report shows we have a strong foundation; now is the time to build on it.”
The report calls on government and regulators to prioritise targeted updates that will modernise Australia’s credit reporting system, suggesting small, practical reforms that could unlock major economic and consumer benefits.
Arca recommends:
- Extending data coverage to include account balances and detailed repayment history.
- Allowing the use of telco and utility data to support Australians with thin credit files.
- Expanding use cases so lenders can use data to better support customers experiencing hardship.
“This isn’t about overhauling the system, it’s about fine-tuning it,” Ms Markula said.
“These targeted reforms would make our system more competitive, more inclusive and more responsive to consumer needs. With cost-of-living pressures rising, that’s never been more important.”
