The Australian Law Reform Commission has stuck to the compromise position on credit reporting it first spelled out in a discussion paper last year, with a recommendation handed down yesterday that lenders not be allowed to look at consumers' payment histories on credit files.The ALRC has recommended that four new pieces of information be added to credit files: the type of each current credit account (mortgage, credit card, personal loan and so on); the date on which each current credit card account was opened; the credit limit of each account; and the date on which each account was closed.These changes would make a significant addition to credit reporting in Australia, which operates a negative reporting system. Most of the information that goes on credit files now relates to defaults and other breaches.While the changes recommended by the ALRC are significant, most lenders were pushing for the inclusion of payment records.The ALRC recommended that the Australian government only amend the Privacy Act to allow credit reports to include payment records after it was satisfied "there is an adequate framework imposing responsible lending obligations in Commonwealth, state and territory legislation."ALRC commissioner Les McCrimmon said changes to voluntary codes, such as the Code of Banking Practice, would not satisfy this requirement.In other words, the ALRC has told the banking industry that if it wants the credit reporting system it prefers it will have to accept more banking regulation. Most bankers will tell you they have to deal with too much regulation already.The ALRC recommendations on credit reporting are part of the 2700 page report on the Privacy Act submitted to the government some weeks ago and released publicly yesterday.Under the existing negative credit reporting model an individual's credit file contains name, address, employer details and a record of credit applications made by the person over the past five years. The file also includes information about defaults (payments overdue by 60 days or more) and the date any defaults were paid. Dishonoured cheques with a value of more than $100 are included in a credit file, as are bankruptcy orders, court judgements and "clearout listings", where the credit provider has failed to locate a debtor.The ALRC said it tried to balance the demands of advocates for a positive reporting model with concerns expressed by consumer groups that more comprehensive credit reporting would not lead to more responsible lending, but quite possibly the opposite.The advocates of positive reporting, mostly banks and other lenders, have argued that more comprehensive files would allow lenders to make better informed lending decisions and reduce the incidence of bad debts. And they have argued that that better access to information would allow lenders to make more accurate judgements when pricing for risk, and this would lead to a more competitive market with tighter loan margins.No one disagrees with the proposition that credit bureau data provide a very limited snapshot of the potential borrower. But the argument with consumer groups came down to a question of whether lenders could be trusted