Improvements to Australia’s credit reporting regime could boost the economy to the tune of around $1.7 billion and help lower interest rates, according to research conducted by Canberra-based economic consultancy Access Economics for Veda Advantage.
The research, the results of which were released today, found that under a reformed comprehensive credit reporting system, banks and credit institutions would have better access to information that would enable them to better manage risk and therefore make more responsible lending decisions.
It suggested that a comprehensive reporting system could potentially affect borrowers, lenders and the economy as a whole through a range of channels including lower default rates, greater access to better-priced credit, lower interest rates, increased competition and a smoothing of consumption patterns.
The research report said the current credit reporting system denied people the ability to make financial repayments on time, while comprehensive reporting would allow consumers to demonstrate they were a good credit risk.
Commenting on the findings, Veda Advantage chief executive Rory Matthews said Australia was lagging behind the rest of the world when it came to credit reporting.
