The introduction of comprehensive credit reporting this week has prompted an outpouring of boosterish pronouncements from credit reporting agencies and lenders, who say the new regime is a 'win-win' for the financial services industry and consumers. That proposition needs to be questioned.Much of the discussion about the likely impact of a move from negative to comprehensive credit reporting, where lenders get to know more about the credit histories of consumers, is based on the work of two US academics, John Barron and Michael Staten, who have been publishing research on the subject since the 1990s. Barron and Staten say a move from negative to comprehensive reduces default rates while increasing consumer access to credit.Access Economics said in a 2008 report this could have significant economic benefits. The whole community stands to gain when "individuals who were previously constrained from accessing suitably priced credit [are] able to do so."Access Economics conceded that improved access to credit would lead to an increase in household debt, which presented a risk to the economy. However, it said "the higher debt need not result in an increased incidence of financial stress because there would be an improvement in risk assessment processes."So there's the win-win: the finance sector is able to expand with less risk, while consumers have better access to credit and they are well placed to manage any increase in their level of debt.ANZ questioned this view in its submission to an Australian Law Reform Commission inquiry into credit reporting in 2008. It said there was no consistent evidence that better credit decisions were made in markets where comprehensive credit reporting operates.The submission said: "The development and significant growth of the sub-prime mortgage market in the United States can be, in part, attributed to comprehensive credit reporting. While this has afforded access to home ownership to a greater number of people, it has also exposed consumers to the declining housing market. While delinquencies have risen for all mortgage categories in the US, the strongest growth has been in the sub-prime market.""Positive credit reporting may lead to the increased availability of lending to previously excluded borrowers at higher interest rates than mainstream borrowers, who may experience a higher default rate," ANZ said.Stephen Johnson, a principal of the financial services advisory firm FIMA, has also argued that the US sub-prime crisis presented a problem for the comprehensive credit reporting advocates. "The US sub-prime crisis demonstrated that over-reliance on credit reporting for credit decisions is flawed," Johnson said in a paper he gave at a conference in Sydney last year.Johnson said there were several factors that might blunt the impact of the change in Australia."Australian consumer credit law imposes a requirement for lenders to assess a borrower's capacity to repay a loan, which limits the impact of credit reporting," he said.Johnson said that because Australia already had a high level of household debt relative to income the new system might not have the impact it would have in a market where consumer debt levels were low.Australia also