March 10, 2015
It is possible to have had a spotless record in paying your bills and yet still have a credit score which does not allow you to obtain finance and reach your financial goals.
Your credit file stores all sorts of information about your financial life.
Not only do credit files store defaults, judgements and writs against you they also list inquires for finance, regardless whether you went ahead with obtaining the finance. *
These includes inquires to credit card companies, car finance, store finance to buy furniture or white goods, as well as to banking institutions.
How does it happen?
When you apply for a financial loan most places require you to tick a box on their paperwork which allows them to assess their risk by carrying out a credit score check on you and at the same time list your enquiry against your name. If once understanding all the terms and conditions, you decide against taking out the loan you have already obtained a black mark against your name.
Why is shopping around for a loan a bad thing?
All lenders prior to agreeing to loan money must assess their risk, and the likelihood of the borrower paying back the loan. Having multiple enquiry listings against your name give the appearance that you have failed to meet the criteria of the lender and have been unsuccessful in obtaining the finance.
This makes potential lenders nervous. As a result they decline your loan and you have yet another bad mark in your credit history.
How can you be sure you are getting the best loan without affecting your credit history?
When using a mortgage broker you will be able to see all the products available to you from all the different lenders that are engaged with that broker.
Viewing and discussing your options with your broker allows you to in effect, “shop around” without applying for multiple loans and therefore without effecting your credit history.
Mortgage Choice currently has over 25 different financial institutions on its panel of lenders. Make an appointment with our mortgage brokers in Mudgeeraba, Gold Coast, today by clicking the “contact us online” button at the top of this page or calling on 5559 2563, to find out the right loan for you without affecting your credit file.
*SOURCE: The Advisor – 14 January 2015 Dr Merrilyn Mansfield