Your Credit Profile is an assessment of your creditworthiness. Comprised of a Credit Score and Credit Report generated using data from your credit history, it can determine whether you qualify for a particular credit card, loan, mortgage or service, and on what terms.
All Credit Reporting Bodies around the world update their scoring models from time to time to ensure they are reflective of the current credit landscape. Equifax’s Credit Score model was updated in January 2017 – for the first time since 2009.
Watch this short video for a comprehensive overview of what is changing and how it effects you:
The new model uses an enhanced algorithm to incorporate more recent learnings regarding the links between credit activity and future credit risk, with additional Comprehensive Credit Reporting information (CCR) introduced as part of the last revision of the Privacy Act. This means most Australians applying for credit will find their score has changed to some degree.
The transition to more comprehensive data allows Credit Reporting Bodies to be fairer when assessing credit worthiness. This will, in time, lead to credit providers placing more importance on good credit-based behaviour – helping people to secure credit, recover faster from adverse situations and minimise the time it takes to establish a credit history.
As more CCR information is disclosed, consumers will benefit from the relative strength and improvement of an Equifax Credit Score being more closely linked to regular on-time minimum repayment of credit commitments.
Still got questions? Check out this easy to understand infographic that helps step you through it.