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Survey finds 93 per cent of SME owners don’t know their credit score

by OnDeck Australia,   Nov 28, 2018


SYDNEY, November 28, 2018


  • Only 53 per cent of small business owners who knew their credit score had checked it within the last year
  • Only 48 per cent of small business owners knew about CCR; responses divided in terms of whether CCR would improve their personal credit scores
  • Just over a third thought CCR should be extended to include small business despite likelihood of more positive credit profile and improved access to business funding under CCR 


A Survey* released today by OnDeck Australia, a subsidiary of the US-listed On Deck Capital, Inc., has revealed a greater need for information and education for small business owners about credit scoring and Compulsory Credit Reporting (CCR)^ and potential positive impact on the future of small business.

The Survey, undertaken on behalf of OnDeck by its business partner, MYOB, asked small business owners about their knowledge of business credit scoring and of CCR.

It found very few small business owners (only 7 per cent) knew their credit score and that only over half of the owners who knew their credit score had checked it within the last 12 months.

Small businesses comprise over 99 per cent of all businesses, contribute to 57 per cent of the GDP, and employ over 7 million Australians or 67 per cent of total employment in Australia.^^

Mr Cameron Poolman, Chief Executive Officer of OnDeck Australia, said there was a disconnect between the small business owner’s knowledge about the benefits of credit scoring and how a lack of knowledge could impact their understanding of the financial position of their business.

“There is an important education opportunity here to help small business owners recognise how knowing their credit score can inform and empower them by potentially creating more opportunities for their business through improved access to funding and funding options. The prevailing lack of understanding around scoring is an issue for small business, especially given the size and importance of the sector to the Australian economy.”

While the Survey found 42 per cent of respondents knew the actual purpose of a credit score, around a quarter didn’t understand what a credit score was while around another quarter believed it was for purposes other than borrowing money such as business valuations or paying tax.

Mr Poolman said it was clear from the results that there was a lot of confusion around credit scores and their role in accessing funding.

“While not all small businesses need access to funding, being informed on how, when and why to get funding is an important part of running a successful business.”

Only 48 per cent of small business owners surveyed knew about CCR. Just over a third of owners thought CCR should be extended to include small business credit scores, however 44 per cent were unsure of the benefit to the business.

“While CCR includes small business owners as consumers, a notable exceptions to the proposed new legislation around CCR is the exclusion of the small business itself,” Mr Poolman said.

“Nine in ten businesses in Australia are part of this sector but small business credit scoring is not captured under the new changes to credit reporting under CCR. The increased competition potentially created by CCR would give all lenders in Australia a fair opportunity to show how they can support the small business sector of our economy. It creates choice and improved products and services through increased innovation; the end user, whether an individual or a small business, is the greatest beneficiary of such a system.”

Mr Poolman added: “The introduction of CCR in other countries has highlighted how the market and the customer can benefit from increased competition where customers use their improved credit ratings to get better deals from lenders. Under CCR, Australian borrowers will potentially have the same advantage,” he said.

“CCR is a positive change for a majority of users of Australia’s financial services system. The increased competition generated by CCR will have flow on effects that go way beyond creating a healthier financial services landscape in Australia.”



* MYOB SME Snapshot September 2018

^ With the introduction of CCR in July this year, Australia moved to positive mandatory credit reporting for consumers, meaning recording positive credit information on credit histories is mandatory for all credit providers. Previously, Australia’s credit reporting system used mainly negative credit information to assess an individual borrower’s credit rating.

^^ Affordable capital for SME growth June 2018 – Australian Small Business and Family Ombudsman

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