Big banks will be forced to reveal the creditworthiness of Australians in a move Federal Treasurer Scott Morrison says will help cut interest rates and boost the success chances of small businesses.

Mr Morrison will today reveal plans to introduce a “mandatory comprehensive credit reporting” regime, describing it as a game changer for consumers and lenders.

Under the proposal, lenders would have much more information about the true credit position of those customers seeking a loan.

He will tell a finance conference today that the scheme will deliver better outcomes for households and grow local businesses and ultimately the entire economy.

“For borrowers, this regime should lead to one thing — a better deal on your mortgage, your personal loan or business loan,” Mr Morrison will say.

“This new transparency will also open up the lending market to new players by enabling them to better assess the credit risk of customers.

“They will then be able to offer interest rates that undercut the major lenders without the fear of defaults weighing heavy on their decision-making.

“Or give them the option of taking on board more riskier customers at premium rates.”

This year Mr Morrison warned the major banks that unless 40 per cent of data was being reported he would put in place a mandatory scheme.

He will announce today that the banks are well short of the 40 per cent threshold.

The big four institutions will be the first required to release credit information.

Mr Morrison said people who had a good credit history would be able to use the data to demand a better deal on their interest rates or shop around.

Small businesses will benefit by having to spend less on finance. And people who would ordinarily be denied credit could, at a price, be able to find a lender prepared to offer them a cash lifeline.

The scheme could be extended to gas, electricity and phone providers because they only have access to default data rather than a potential customer’s broader credit picture.