3 surprising things that affect your credit score

September 23, 2015
Herman Esterhuizen

Nothing tells a lender more about how you manage money than your credit score and it may affect the rate you are offered…

Pay slip. Check. Bank statements. Check. When it comes time to applying for a loan it’s good to have all your ducks in a row. But there’s one aspect many people overlook. And that’s their credit score.

We each have a personal credit score maintained by credit reference agencies, and it’s based on a number of factors noted in your credit record like how well you have a managed debts and bills in the past, how many applications you have made for credit; and whether you have any major black marks like personal bankruptcies. 

Your credit score matters because each time you apply for a loan the lender will take a look at your personal credit score as a way of gauging how responsible you are with money matters. Not only can your credit score determine whether you are offered a loan, it can also impact the rate you pay.

Despite the importance of credit scores, industry research shows almost eight out of ten Australians have never checked their credit report. I can can help you discover how your credit score shapes up and you can request a copy free online in some cases. But in the meantime, it pays to be mindful of three key factors that can negatively impact your credit score.

Making multiple loan applications

When you’re in the market for a home loan it can be tempting to submit loan applications to a wide range of lenders in the hope that at least one of them will offer you a loan. It’s essential to resist that temptation.

You see, every time you make a loan application it’s noted in your credit report. Lenders who come across multiple applications can be spooked by concerns that you may have been rejected by other banks.

A better way to go about this is to speak with me as I can provide support and guidance to help get your loan application over the line. It’s also a lot quicker than filling out reams of loan application forms.

Paying bills late – or not at all

Paying bills on time doesn’t just make good financial sense, it also keeps your credit score healthy. Overdue or unpaid bills plus late repayments on loans or credit cards are noted in your credit file, and this sort of information can make lenders nervous about your ability to manage a home loan. A better approach is to pay on time, every time.

Failing to keep tabs on your credit record

Clearly, there is a lot at stake with your credit score so it pays to review your credit record at least annually.  This lets you pick up any mistakes at an early stage, keep your personal details current if you move or change your name, and identify any possible attempts at identify fraud.

Remember, your Mortgage Choice home loan expert can provide a copy of your credit record and walk you through the information it contains and how it may impact your credit score. To book your appointment with me, call 08 9287 1030 or click here

Posted in: Tips

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