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Survey shows that Australians are Misinformed about Credit File

April 10, 2015

Research done by a company in Australia shows that a large no. of borrowers are unaware about the effect of their financial decisions on their credit score.

According to survey:

  • Around 65% of Australians incorrectly believe that contributing to superannuation or saving money can have a positive impact on their credit score.
  • 33% of participants said they were nervous about their ability to access and manage credit.
  • 23% understand what a credit score is and how it is used by lenders to grant credit.

The figures highlight a knowledge gap when it comes to understanding the way credit works”, said Andy Sheehan, Experian managing director of credit services.

He further added, “Australians are too busy ‘getting by’ to worry about their creditworthiness and our research shows that they are alarmingly misinformed when it comes to credit reports”.

In order for this to become the norm here, Australians need to be better informed and more proactive with their credit application,” he said.

The introduction of comprehensive credit reporting in the Privacy Act in 2014, was a step to boost Australians, so that they may become completely aware of their credit reports.

Mr Sheehan said, “Comprehensive credit reporting is good news for consumers as the negative credit reporting system doesn’t take good credit behaviour into account”. Also, Australians deserve to be recognised for good financial behaviour, and this should be reflected in our credit report to enable better deals.

According to survey, in the current time, 88 per cent of participants cite day-to-day expenses, rent or mortgage repayments, groceries and bills as the most common barriers to paying down debt.

Our research suggests that about 19 per cent of Australians pay only the minimum repayment on their credit card, and five per cent of those people prefer to put extra cash in savings instead of paying down their debt,” Mr Sheehan said.

News Source: http://www.theadviser.com.au/breaking-news/31711-australians-alarmingly-misinformed-about-credit-reports

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