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A report by the Australian Retail Credit Association (ARCA) has found that Australians are largely positive about the new credit reporting system set to be introduced next month.

The 12 March 2014 reforms to Australia’s Privacy Act will see extensive changes to the credit reporting system including the introduction of the Credit Reporting Privacy Code drafted by ARCA.

In its report, ARCA found three in four Australians (74 per cent) believe the credit reporting system is either very important (33 per cent) or important to them (41 per cent).

For Gen Y’s, 47 per cent of 18-29 year olds say it is very important compared to 31 per cent of Gen X’s (30-44 year olds) and 23 per cent of baby boomers (55-65 year olds).

The upcoming reforms will provide a clearer picture of a consumer’s ability to repay debts, enable better matching of consumer credit needs and give fairer access to credit with increased consumer protection.

“The new comprehensive reporting system is designed to give lenders a more complete picture of a consumer’s debt situation, and consumers more control over their credit report,” ARCA CEO Damian Paull said.

“It’s encouraging Australian consumers, especially the younger generation, view the credit reporting system as important – as this helps consumers better understand their financial position,” he added.

Other key statistics to emerge from the report included:

  • One in four (25 per cent) consumers feel stressed when it comes to managing credit and their own personal financial situation.
  • When informed about what the changes will mean, just over half of consumers feel the new system will make things better for them, particularly those in the lower income bracket.

“Managing finances is not always easy and our research shows that managing credit can be quite a stressful ordeal for some. The new reporting environment offers a second chance for those ‘not so good payers’ who may have had a default in the past,” Paull added.