Australia’s credit reporting framework has recently undergone a fundamental shift away from a negative only reporting system to comprehensive credit reporting (CCR). Under the changes, lenders can 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.
This report investigates the knowledge and attitudes of millennials (consumers born between 1980 and mid-2000) towards credit. The report also considers future implications of the shift to CCR in Australia, including the potential use of non-traditional data to assess creditworthiness. Millennials comprise almost a quarter of the population and are the fastest-growing segment of the consumer lending market in Australia. As millennials apply for credit cards, personal loans, car loans and home loans in coming years, lenders will have a range of new tools to assess credit risk and determine millennials’ access to credit.
This research, commissioned by the Customer Owned Banking Association (COBA), aims to stimulate discussion about the implications of changes to credit reporting for millennials among Australian consumers, policy makers and industry.
This report is based on a three-stage study conducted over a 12 week period, which relied on a primarily qualitative approach. This included: a comprehensive review of domestic and international literature, 15 semi- structured interviews across seven key informant groups, and two focus groups with 12 millennials. The findings presented are strictly informed by the literature and the qualitative data collected; they do not reflect the views of Good Shepherd Microfinance.
Tags: COBA, credie reporting, credit reporting and millennials, Customer Owned Banking Association, Good Shepherd Microfinance, positive credit reporting, Take Charge