Credit Score When Applying For Home Loans – 4 Things You Should Know (Australia)


Sam: Is your credit score going to be affected
when researching or applying for a home loan? Watch this video to find out when it will
be checked during the process and how this may impact your credit score. Sam: Hey guys, it’s Sam. Here at Lendi we’ve helped thousands of Australians
get approved for a home loan, so we know a lot about credit scores. Today we’re going to go through the four main
things you need to know about your credit score Now, before we start if you’re interested
in great home loan tips in Australia, please make sure you subscribe to our channel and
hit the bell so you can be notified when we post new videos. Sam: We’ll start with what is a credit score. A credit score helps lenders evaluate your
behavior with previous and current debt. There are a number of different reporting
agencies in Australia, Equifax being the largest. They rate your credit score on a score between
0 and 1,200, and below average and excellent. Every time you actually apply for finance
your credit score is going to be checked whether this be a credit card, a car loan, a home
loan, or a personal loan. Each time you actually apply for finance this
will leave an inquiry on your credit file that will show up the next time you apply for finance. Sam: The credit scoring system was updated
in July 2018. Now your credit score could be impacted by
both positive and negative situations and actions surrounding your credit file. The main types of actions below, are the number
of inquiries so every time you actually apply for credit whether it be a car loan, a home
loan, a personal loan, or a credit card lists an inquiry on your credit file. The more inquiries on your credit file can
negatively impact your score due to high activity on the credit file. Sam: Thanks to the introduction of comprehensive
credit scoring lenders now have access to repayment history and conduct, and things
like late payments, over limits, and on-time payments are all reported. This can both positively and negatively impact
your credit score. It goes without saying that defaults and bankruptcy
look bad on your credit file, and they’ll significantly impact your ability to borrow
and limit the products and lenders available to you. However, certain products will be available
depending on the situation and whether they can be mitigated to be approved for that loan. Sam: Is checking your credit score bad? The short answer is no. Simply checking your credit score leaves what’s
called a file access note on your credit file and is not visible to lenders. This is different to an inquiry that’s lodged
when you apply for finance. Your broker may also check your credit score
through a file access note, which again will not impact your credit score as an inquiry
is only lodged when your loan is submitted to the lender. Sam: How can you improve your credit score? If you’ve got a low credit score there’s no
quick fix. However, there are a few things that you can
do to raise it. First of all, you need to make sure that you
limit your inquiries especially if you’ve recently been declined for finance. Don’t just quickly apply for another lender
as this will simply be another inquiry on your credit file and can continue to lower
your score. Sam: The next thing you can do is make sure
you pay all your bills on time. Since the launch of comprehensive credit scoring
your payment history on credit cards and other debts is now visible, and this can lower your
score. Lastly, make sure you pay off any outstanding
defaults or judgements on your credit file. Sam: That’s it guys, everything you need to
know about how your credit score can be impacted during your home loan application. If you found this video useful remember to
give us a thumbs up and leave any comments in the section below. You can also join our private Facebook group,
Home Loan Hacks Australia where we talk all things home loans and answer other questions. If you want to know more about the refinance
process watch this video to learn more about it.

11 comments on “Credit Score When Applying For Home Loans – 4 Things You Should Know (Australia)”

  1. Lendi says:

    Thanks for watching! Were you surprised about what might impact your credit score when applying for a home loan? Please let us know in the comments below 😊

  2. Kristina Clough says:

    Very informative Sammy! Awesome work

  3. Stuart Ronneberg says:

    Great Video, Thanks Sam

  4. Emer Hogan says:

    Very helpful thank you!!

  5. Matt Wade says:

    Super informative thanks!

  6. Alberto Gorgioski says:

    Very helpful, thanks Sam!

  7. Ben Dunlop says:

    So every time I apply for a loan being home, personal or car it can effect my credit score, why hasn't any leader told me this in the past.

  8. robert fredrick says:

    This just confirmed and I applied for my $12000 car loan, through [email protected]

  9. Inam Ahwang says:

    🤙🏽 nice to know

  10. Yuhao W says:

    Hey, will credit utilisation ratio impact credit score, given it's paid ontime? i.e. if credit card limit is 10k, will credit score defer between using 5k/10k vs 10k/10k for a given month? Also, is there a difference, credit score wise, between paying back the credit due 1 day before due date, vs 10 days before due date?

    Thanks!

  11. russell field says:

    Fuck off

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