Credit reporting rules due to take effect in July will help lenders’ mortgage insurers price risk and facilitate home ownership, the Insurance Council of Australia says.

The legislation will set up a mandatory comprehensive credit reporting (CCR) regime, providing a more complete picture of a consumer’s financial situation.

The Insurance Council says lenders’ mortgage insurance (LMI) providers rely on access to information such as defaults, bankruptcies, writs or summons when pricing cover.

“Initiatives that support CCR can significantly enhance an LMI provider’s ability to accurately assess risk and provide LMI for the benefit of potential borrowers,” ICA CEO Robert Whelan says in a submission on the proposed legislation.

“This is the central reason why the Insurance Council supports the proposed reforms.”

The Government says the changes will benefit consumers seeking to demonstrate their creditworthiness and provide a more complete picture for providers.