The mandated Comprehensive Credit Reporting (CCR) information supply deadline is fast approaching and, in preparation, the big four banks are loading CCR data on an ever-increasing number of platforms. Equifax can confirm that the banks have now shared 40% of the mandated CCR data, with another 10% expected by the end of September 2018.
Unlike most other players in the financial sector, “Access Seekers” – brokers or similar third parties dealing with a credit reporting body or credit provider on behalf of a customer – don’t have to supply CCR data in order to consume it and so will soon be able to reap the benefits.
With their immediate access to CCR data, brokers are already in a position to offer better terms for their clients and uncover inconsistencies in their applications, ensuring that they’re finding the best option for their clients’ needs.
Impact and opportunity
From a broker perspective, the inclusion of CCR information in credit reports will offer a number of new opportunities, impacting the way they engage and service their customers. Repayment History Information, for example, presents an opportunity for brokers to demonstrate that their client is a high-value customer and gives them grounds to bargain for better terms, which can greatly improve the client experience.
Conversely, these new data fields may also uncover inconsistencies between what the client has shared in the application information and what is showing on their credit profile, helping brokers to protect themselves from unknowingly taking on unscrupulous customers or originating ‘liar loans’.
CCR data will also help brokers who leverage automated solutions for their clients by feeding in more data to produce better outcomes faster and at a lower cost.
The consumer perspective
Despite the changes that CCR will bring, consumers have very little understanding of the impacts the transition to CCR is likely to have. Research from peer-to-peer lender RateSetter earlier this year showed that 67% of Australian consumers have no knowledge of the impending changes to credit reporting.
While widespread coverage of CCR in recent months may have shifted the dial somewhat on consumer awareness, the point remains: ‘Average Aussies are unlikely to have any detailed understanding of CCR and how it will affect them.’
Brokers and other access seekers have an immense opportunity to influence and educate consumers whilst working with them to find the right loan. The reach of this group should not be underestimated – after all, more than 55% of new residential home loans were originated by brokers in the March 2018 quarter.
By helping inform and educate their clients about these significant changes to credit reporting, brokers can showcase the added value they can deliver and strengthen their customer relationships.
Mike Cutter is Equifax’s group managing director for Australia and New Zealand.