By
Rachel Maher
Next time you want to obtain some form of credit, firstly obtain a copy of your credit report.
In Australia you can obtain a free copy from Veda Advantage. Now read
it like a Lender, using the below 8 points. Would you lend yourself more
money when you put on a Credit Provider's hat?1. ADVERSE LISTINGS
There are three different types of adverse listings that can be displayed on your report in Australia. They are defaults, court actions (like judgments, writs and summons) and bankruptcies. Defaults are overdue accounts, such as late or missed payments to household bills. Any of these types of listings will instantly make a lender scrutinize your application in much greater details or even instantly decline it. You need to be able to explain clearly to the Lender as to why the listing exists, but be prepared that some lenders have very strict policies that cannot be swayed.
2. HOW OLD ARE THE ADVERSE LISTINGS?
In Australia, adverse listings will stay on your credit report for 5 to 7 years. After this timeframe they will automatically drop off. If you have very recent listings, then you can expect the Lender to be particularly dubious about your credit worthiness. If your listings are approaching the drop off period, by supporting your application with a very clear explanation of why the default occurred, you may just be able to get your application approved.
3. TOO MANY ENQUIRIES
If a Lender sees that you have applied for credit (any type) with numerous credit providers all around the same time, this can be detrimental to your credit application. The Lender will assume that you are constantly getting declined, because you continue to apply. Consequently if you have too many enquires, be prepared to be knocked back. Remember, only apply for one loan and wait for the outcome.
4. LACK OF ACTIVITY ON YOUR CREDIT REPORT
Unjust as it may sound, if you have virtually no enquires for credit listed on your report, this can also cause suspicion in the eyes of the credit provider. They assume that you may either have a floating report, such as using a different name to hide past misdemeanors or alternatively they are concerned that if you have never had credit before, you are now a risk due to lack of repayment experience.
5. POSSIBLE MATCHES
A number of identity questions need to be provided about you when a Lender applies for your credit report. If a number of the identity questions match with a number of different reports, it will show that there are possible matches. This is common for women who have married, as they may have had credit in their maiden name. Men generally shouldn't have matches. In the past, fraudulent people have tried to adjust their information so a new credit report is created, thus thinking any previous report with detrimental information would not be found. By showing possible matches this helps Lenders catch such schemes, and highlights why possible matches make Lenders suspect possible fraud.
6. ADDRESSES
If you have too many different addresses over a short period, Lenders can often view this as meaning you are unstable and can hinder their consideration to approve you finance.
7. PAYDAY LENDER ENQUIRIES
By having Payday lender enquiries listed on your credit report, these can be viewed as a sign that you are unable to meet your existing financial commitments. Subsequently, most Lenders will not approve your application for credit.
8. EMPLOYER INFORMATION
Similar to the Payday enquiries, if you have substantial changes of employment or your application's employment information does not match what the credit report states, it can cause the Lender to question your reliability.
Now, wearing your Credit Provider's hat, would you "approve" your application or "decline" it?
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