Getting a loan for your next property purchase or refinance is already a big enough issue, without the hassle of a poor credit report. Whilst there are lenders who will lend without referencing a credit report, and there are lenders who will lend to you even if you have a low credit score, the reality is you might end up paying a higher interest rate. It’s all about risk and returns for lenders.
Here are some tips from a recent webinar from a credit repair company. They specialize in ‘fixing the fixable’ on your credit file. Whilst there are some things you (and they) can’t fix, and there are some things you can ‘do yourself’, the reality is that most of us don’t have the time or inclination to deal with parties who we don’t know and don’t know how they will react to our request.
The credit repair businesses do this for a living and it is fair to say that because they do it for a living, they know who will do what and by when. And, many of them effectively have an ‘express service’ relationship with many creditors so they can do things knowing what is possible and what is not. As with most things, you get what you pay for….
Personal
1. Regularly check your credit report. You can get a subscription with Equifax and/or Illion for around $10 per month. This can be money well spent when you are going for a loan.
2. Be aware when enquiring online. Certain low-grade inquiries can affect your credit score – currently, buy now pay later inquiries to reduce your credit score by around 50 points per inquiry. The good news is there may be able to be removal.
3. Missing repayments on home loans, credit cards, etc. can negatively impact your credit score.
4. Like going commando, going without any credit facility or record can be risky. Two years without any inquiries (including no phone plans, utilities, etc) can reduce your score. Solution? Apply for a low fee plan for a phone so you are ‘checked’.
5. Protect your data online. Currently, there are scams on the internet and fake emails pretending to be from the Post Office and other agencies.
6. Income verification is coming.
7. Check your direct debit due dates and make sure you have the funds to meet them.
8. You have 3 personal credit reports issued (Equifax, Experian, and Illion) – whilst 2 out of 3 ain’t bad, when it comes to credit reports the gold standard is 3 out of 3.
|
Credit Band |
Equifax | Experian | Illion |
|
Excellent |
833-1200 | 800-1000 | 800-1000 |
|
Very good |
726-832 | 700-799 |
700-799 |
|
Good |
622-725 | 625-699 |
500-699 |
|
Fair / Average |
510-621 | 550-624 |
300-499 |
| Weak / Below Average | 0-509 | 0-549 |
1-129 |
Business Owners
9. Make sure everything is in order with the business. Your company’s credit score can be affected by late supplier payments.
10. Anything you do personally and commercially affects both your personal and company credit files.
11. There is a Creditor Watch company report you can access via Infotrack.
Would you like more information? You can ring us now 1300 989 878 or email us at moreinfoplease@bir.net.au
