Utilities and telco companies expand a consumer’s credit file

The lending environment forever changed in 2008 thanks to the GFC.   Up went more restrictions, the need for stricter compliance, and a more risk-averse lending climate. Sure, financial institutions have since lowered some of the lending hurdles, but it can still be challenging for a consumer to rebuild or establish credit. 

This period help kickstart the comprehensive credit reporting environment in Australia where the obvious strategy is to add a debtor’s payment  utility, rental, telecommunication, cable, or other regularly (i.e. monthly, quarterly) billed payment obligations to credit bureau data inputs. This is termed as Comprehensive Credit Reporting. 

If a consumer has no regular payment obligations but is renting an apartment, they will most likely still have a rental, electricity, gas, and other utility bills to help them establish a credit history. If a consumer had difficulty maintaining good credit in the past and is looking to rebuild, having good payment performance reported from rental, electric, gas, and other utility bills will only help drive that consumer on the rebuilding path, opening access to more credit options. 

Positive utility and mobile phone reporting present an opportunity for these companies to play a key role in helping their consumers build a credit history. The ability for many of these consumers to improve their credit score, build a robust credit profile, and potentially migrate to a better risk segment simply by paying bills on time is a worthwhile pursuit.