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Tips on how to work around the new credit reporting system
By: Chan & Naylor
Believe it or not, people can lose their homes simply because of such enquiry. In this case, a mortgage broker can help them find a lender that would lend to them despite a bad credit score but the rate would be higher.
Credit reporting is the first thing a bank does when assessing a loan application. Starting 1st July, the Comprehensive Credit Reporting system will take effect. This makes it easier for lenders to make a comprehensive and balanced assessment of an applicant's credit history.
As early as now, loan applicants are already feeling the impacts of the new system, which now requires information about current accounts they hold, what accounts have been opened and closed, the date that they paid any default notice and how well they meet their repayments to the banks and utilities. The higher the credit score, the better. If the credit is bad, a mortgage broker may help and work harder to get them a loan.
This system has already been adopted in the U.S. and UK where credit reports can be used to negotiate with banks for a better deal. To have a good credit report, make sure you pay bills on time, pay off outstanding loans and credit card debt, make your monthly repayments on time every month, have an available credit limit which is much higher than your usual credit balance and hang on to good credit accounts where you have faithfully made repayments on time for several years.
Take note that applying too often for loans or credit cards, making late payments or having overdue balances of at least $150 for more than 60 days, getting multiple balance transfer from credit cards one after another and not optimizing direct debits for quick and regular payments are all not good for your credit report.
If you are looking for a good deal in terms of loans, please contact me on 1300 30 67 67 to know how you could boost your credit report.
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Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.