Did you know you could improve your credit score by paying off your RentBond loan on time?
How does RentBond affect my credit score?
Fair Go Finance, the financial provider behind RentBond reports positive payment history, or Comprehensive Credit Reporting (CCR). Thanks to CCR, some 62% of RentBond customers have experienced a positive change in their credit score after successfully applying for and then paying back their RentBond loan.
Fair Go Finance was Australia’s first small loan provider to go live with CCR back in October 2019!
Since the change was implemented, active RentBond loan customers with good repayment history have seen an immediate improvement in their credit score.
What is the difference between positive and negative credit reporting?
Positive payment history shows that you paid back your rental bond loan on time and as per your agreement. CCR can ensure that using credit will give you the best opportunity to be accepted for a loan, credit card or any other type of credit the next time you apply.
Conversely, negative payment history would reflect that you missed payments or have not paid what you owed in full.
It is worth considering how you can change your behaviours (and credit usage habits) to improve your chances of being accepted for credit.
What is Comprehensive Credit Reporting?
Here’s how Comprehensive Credit Reporting (CCR) works in more detail. CCR, also known as positive credit reporting, is how your credit information from financial institutions must be reported to Australia’s credit bureaus.
Interestingly, these credit bureaus (the likes of Equifax, Experian and Illion) previously only used to receive and record negative credit information on your record. That could have been anything from missed loan or credit card payments, missed bills, defaults or even bankruptcy.
Then, in 2014, the Australian Government legislated a change that meant we moved to comprehensive credit reporting, or CCR. The Government imposed two deadlines for the ‘big 4’ banks, which were taking their time to implement the CCR. From September 2018, it became compulsory for the big 4 to report their credit data to the bureaus.
What are the benefits of CCR?
Under this change, your credit report now includes repayment history information, as well as additional credit information. This change gives a more complete and fairer picture of your credit history, such as when you make your loan repayments by the due date.
CCR makes it easier for you to show how responsible you are with your finances, which is excellent if you want to look at borrowing money in future.
Any positive payment behaviour that gets reported should help to offset any negative records, such as missed payments. In other words, your credit rating or score should not be impacted significantly by one negative event.
This positive information can benefit you if you are consistent and reliable with paying your bills and loans on time. It will help to improve your credit rating, as well as your ability to obtain cheaper finance if it is available.
Applying for RentBond is quick and easy. Paying your rental bond in smaller instalments lets you save money for more important things, like enjoying your new home! If you’d like more information about RentBond, visit the rent.com.au website, email firstname.lastname@example.org or call Rent.com.au on 1300 736 810.