For reference, a soft credit enquiry such as seeking a quote or determining if you qualify for a particular product is not recorded on credit reports.

On the other hand, a hard credit enquiry such as an application for credit is recorded to allow the credit provider to determine your creditworthiness.

The proposal comes following the Office of the Australian Information Commissioner (OIAC) completing a review of Australia’s Credit Reporting Code.

The review revealed Australia’s credit reporting framework does not differentiate between a hard and soft enquiry, with all credit enquiries recorded on an individual’s credit report regardless of their purpose.

The introduction of a soft enquiry framework was one of the proposals put forward, aimed at identifying improvements to the Credit Reporting Code to enhance the rights of individuals.

In a submission to the review, one of Australia’s largest credit reporting agencies - Experian - noted the introduction of soft enquiries would increase competition among credit providers resulting in better outcomes for individuals.

Experian General Manager of Credit Services Tristan Taylor said Experian supports a framework that lets borrowers seek quotes or gauge eligibility for loan products without applying for them and it impacting their credit file.

"The ability for individuals to shop around for better pricing without a hard enquiry on their credit file will increase competition among credit providers and result in better outcomes for Australians," Mr Taylor told Savings.com.au.

"This will bring Australia in line with other markets around the world.”

Australian Information and Privacy Commissioner Angelene Falk said credit reporting information is a type of personal information that has a major impact on an individual’s life.

“The ability to obtain credit affects our capacity to participate in the economy - our ability to buy property or obtain a loan,” Ms Falk said.

Australian Retail Credit Association Chief Executive Officer Elsa Markula said the proposal to introduce a framework for soft enquiries is a key area of consumer reform.

“(This) will enable consumers to shop around to understand the pricing of credit products, without any record being made on their credit report,” Ms Markula said.

“These changes will bring about greater consumer choice and bring Australia in line with overseas counterparts, including New Zealand.”

Amongst the other proposals from the review include streamlining processes for individuals accessing reports and correcting information, and offering automatic extensions to those subject to identity theft when a ban on their credit report is requested. 

Proposals put forward by the OAIC intend to be implemented over the next two years through variations to the Credit Reporting Code.

See more: How does a credit score work?

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LenderCar LoanInterest Rate Comparison Rate* Monthly Repayment Interest Type Secured Type Early Exit Fee Ongoing Fee Upfront Fee Total Repayment Early Repayment Instant Approval Online Application TagsFeaturesLinkComparePromoted ProductDisclosure
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7.19% p.a.
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16.95% p.a.
32.99% p.a.
$497
Fixed
Secured
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$26
$125
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7.61% p.a.
$391
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$12
$250
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7.69% p.a.
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8.50% p.a.
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$15
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Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates are for unsecured personal loans only for the relevant amounts and terms. The comparison rates for car loans and secured personal loans are for secured loans unless indicated otherwise. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

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