Detailed information about credit card and mortgage repayments will be made available in new personal credit reports which come into effect in March.
Lenders and credit reporting groups say the changes to privacy laws around credit reporting - covering people's credit card and loan repayments - will benefit potential borrowers by showing a complete, "positive" credit history rather than just negative events such as defaults.
Consumer credit adviser groups are concerned, however, that new records that include any missed monthly payments will disadvantage people already under financial stress, and make credit more expensive for them in the future.
The new Credit Reporting Privacy Code takes effect on March 12 and the Australian Retail Credit Association (ARCA), which represents credit providers and credit reporting bodies, says making more information available to lenders will help consumers.
ARCA chief executive officer Damian Paull said the new reports, which will include details of all credit products a person holds and their payment history for those products, would give lenders a better picture of a person's capacity to pay for a new loan.
"The current system of credit reporting is probably unclear and creates reports on negative events in a consumer's life," Mr Paull said.
However consumer credit legal adviser Alexandra Kelly said her organisation has concerns about the new legislation.
Ms Kelly, co-principal solicitor of the Consumer Credit Legal Centre NSW, said the new reports could show a missed payment that is as little as five days late, and that could affect how borrowers are assessed by lenders in future.
"Our concern is they are going to have a regime like they have in America, where they have higher interest rates on credit being offered to people who have had repayment difficulties," she said.
Under the current laws, only defaults, where a debt is outstanding for more than 60 days, appear on credit reports.
Ms Kelly said the level of financial distress in NSW remained fairly constant, with her centre answering about 20,000 calls a year.
Credit card related distress tended to be seasonal, with February a busy period as Christmas season bills start rolling in.
Credit report providers say having more details of a consumer's good payment history will allow lenders to offer lower interest rates, but Ms Kelly fears other consumers will pay the cost.
"I think that the corollary is that the public who are not making their payments on time take the hit of the higher rates," she said.
Financial Ombudsman Service lead ombudsman on banking and finance Philip Field said the new positive credit reporting standards should lead to better lending decisions.
"But we might get downsides - (consumers) may find themselves being refused credit they may have otherwise got," he said.
"That may be good or bad depending on your perspective."
Credit reports are used by organisations when consumers apply for loans, credit cards or even mobile phones, and Mr Paull said it was important for them to understand what their credit report contains and how to manage it properly.
Other changes coming in make it easier for consumers to correct mistakes in their credit report by requiring companies to help fix errors.
ARCA has developed a website, creditsmart.org.au, where consumers can learn more about the new credit reporting laws.
"Consumers are entitled to one free credit report a year and it's important to understand what information is being reported by the lenders," Mr Paull said.