We recently wrote about the Comprehensive Credit Reporting mandate. The mandate changes the credit reporting process. What this means is banks and lenders have more information than ever about the financial activities of borrowers.
Prior to the law changing, banks, lenders and other credit providers were able to access ‘negative’ borrower information such as late payments, defaults, bankruptcy and rejected applications.
Following the mandate, banks, lenders and other credit providers can now access ‘positive’ borrower information as well. This includes approved applications, account balances, repayment history, closed accounts, account types and names of credit providers.
The new mandate also means missed and late payments are now included in credit reports. This is for both current and previous debts. This could lead a credit provider to form a negative opinion of an applicant where previously this information was not available.
The aim of this new system is to give credit providers a more complete understanding of a borrower’s financial position. Those who support this system feel it gives those with improving habits a fairer chance when applying for credit, especially in situations where unfortunate life circumstances have led to credit issues.
Do you think the comprehensive credit reporting process is fair for all?
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