These new reporting rules mean that finance providers will know much more about you than your credit rating when you apply for your next mortgage, personal loan, credit card or payday loan – your CCR lays bare your current debt position, your repayment history and your capacity to repay any further loans.
So, finance providers don’t have to take your word about how little you spend on Uber Eats, Netflix, or your capacity to repay more debt. No matter what you assure them in your loan applications, they already know everything they need to approve or deny you further finance.
Put simply, finance providers won’t be lending more but they will be lending more carefully. That’s why any suggestions that these new simplified lending rules will lead to a debt driven recovery are more spin than win.