Credit Reporting: Millennials want answers

According to a Customer Owned Banking Association (COBA) report, Millennials want answers about how credit reporting is going to affect them.

The COBA commissioned report by Good Shepherd Microfinance, TAKE CHARGE: CREDIT REPORTING and millennials includes polling that shows millennials are prepared to change when given the facts on how financial data can affect them.

“The report reveals some valuable insights and attitudes from younger Australians to their credit history and on managing expenses,” COBA CEO Mark Degotardi said.    “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.”

Australia’s credit reporting framework has recently undergone a fundamental shift away from a negative only reporting system to comprehensive credit reporting (CCR).

Polling of 18-34 years olds to accompany this report found that:

icon-unaware 64% had not heard of or didn’t understand the term ‘credit report’ and 73% were not aware of the CCR changes
icon-deal 72% liked the idea of getting a better deal because of a positive score
icon credit-card More than half were worried by missing out on a good deal if they had a bad credit report
icon credit score 58% wanted to learn more about CCR and find out their credit score
icon online finance Around half said they were going to make more effort because they could see the importance of their credit file in the future

Competition in the credit market is fierce and lenders today must assess the creditworthiness of consumers quickly and accurately. Typically, lenders rely on credit assessments that detail a person’s credit history. Lenders manage credit risk based on the principle that a person’s use of credit in the past is the best predictor of their use of credit in the future. Lenders use internal records and information from credit reporting bureaus to create ‘credit scores’ that indicate the likelihood of a consumer defaulting on their loan.

So who are the Millennials?

A brief snapshot, courtesy of the Good Shepherd Microfinance report, is as follows.

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