Credit Conduct

How Lenders Assess Credit Conduct

Credit conduct assessment is not limited to a credit score. Lenders examine both the formal credit file held by credit reporting bureaus and the borrower's actual transaction behaviour visible in 3–6 months of bank statements.

Comprehensive Credit Reporting (CCR)

Australia's Comprehensive Credit Reporting system means that credit files now contain positive as well as negative information. Where credit providers participate in CCR (which includes the major banks and many non-bank lenders), the following information appears on the credit file:

• Repayment history: monthly repayment status across all participating credit accounts — whether payments were on time, late, or missed
• Credit limits and balances: current and historical credit limits across credit cards and revolving facilities
• Account opening and closing history
• Credit enquiries: every formal credit application made in the last 5 years
• Defaults and serious credit infringements: unpaid accounts listed by creditors
• Court judgements: writs and summons related to debt

Under CCR, a borrower who has been consistently making minimum payments (without technically defaulting) may still have a repayment history pattern that raises lender concern — because the positive repayment data is now visible.

What lenders look for in the credit file

• Defaults: the presence, size, age, and paid/unpaid status of defaults
• Repayment history: any pattern of late or missed payments, even without a formal default
• Enquiry frequency: multiple credit applications over a short period can indicate financial stress or shopping around excessively
• Credit utilisation: consistently high balances relative to limits across credit cards

Bank statement conduct

Separately from the credit file, lenders review 3–6 months of primary transaction account statements. This review looks at spending patterns, income consistency, and financial behaviour indicators.

Factors that typically attract scrutiny during bank statement review:

• Gambling transactions: regular use of betting platforms, casinos, or gambling apps — even at moderate levels
• Overdraft usage: accounts regularly going below zero balance
• BNPL usage: multiple active BNPL facilities used frequently
• Unexplained cash withdrawals: large or regular cash withdrawals without obvious purpose
• Consistent account depletion: accounts falling to near zero within days of pay day
• Transfers to unidentified accounts: regular transfers that don't correspond to identifiable commitments

Practical preparation

For borrowers preparing to apply, 3–6 months of clean banking conduct before application is the standard guidance. This means:

• Avoiding gambling transactions entirely during the review period
• Maintaining positive account balances
• Reducing BNPL usage
• Avoiding multiple credit applications in the period before applying

Related pillar

Credit conduct sits within the Borrower Profile and Policy Sensitivity Pillar.