Too often loan applicants do not consider their credit report.
If you pay your bills on time why would you think about it at all.
With credit fraud and the general move to e statements now more then ever it is important to know your current report and check on on it regularly to make sure nothing has changed.
As a mortgage broker I automatically offer my clients the complimentary service of ordering their credit report with their signed consent. It means we can identify early on in the process if an error is noted on the report, or a payment issue has resulted in a negative score on their credit report.
Negative scores can occur for many reasons.
And each time the client is surprised it has even happened.
Example 1
You have closed a credit card and no longer go online to check the statements, and a direct debit goes through after the account closure.
Account closures do not cancel direct debits.
Example 2
You signed up for a credit card and did not realise it had an annual fee.
As you do not use that credit card you do not check the statements.
The annual fee gets charged and you miss the statement due date.
Any late payment reflects on your credit report. How much of an impacts depends on how many days it is late and the amount owed.
Example 3
You thought you had made the final payment on your car finance but had not.
Often these missed payments are not even for large amounts. But the impact of how recently they occurred in relation to your loan application can be significant.
We are all encouraged to save paper and go t e statements, but how many times has a statement ended up in your spam box and been missed? or you did not log in to see if a charge has arisen.
Your overall credit score
May be impaired by a large number of credit enquiries made as part of identity theft, or even just your own credit applications.
If your overall score is too low it won't suits many of the mainstream lenders
We would all like to think "it won't happen to me" with a poor credit report.
But it can.
And often at the worst time.
Imagine if you had bought a property at auction and then you found out there was a problem with your credit report, or perhaps you loan application is just declined without a reason. What do you do? if you have a short settlement the chances are you do not have many options.
Whilst you have time before you apply for finance- order your free credit report from one of the 3 reporting bodies (bureaus) in Australia that hold your personal information Equifax, Illion and Experian.
(Ideally check all 3 credit reports before you apply for finance, but even if you just check 1 it is a good start)
(Do not use a different way to access you report as the supplier may use your information for marketing purposes - If you are concerned your mortgage broker can assist you in accessing your report).