If you have bad credit or are only just starting to build your credit it can be 
hard to get a loan, as lenders see you as a high risk customer. Until you raise your credit score, banks may not want to deal with you.
There are a number of things that can hurt your credit rating:
- Paying your debts late or not paying at all
- Having an account sent to collections
- Defaulting on a loan
- Filing for bankruptcy
- Multiple credit applications
I didn’t realise that was recorded on my credit report!
Unfortunately, most people don’t realise that every time they are offered (and accept) a new credit card, this counts as a ‘credit enquiry’. And when you have multiple credit enquiries in a short period of time, this can reduce your credit score, making it harder to get a loan.
Seeking pre-approval from numerous lenders when looking to buy a home might seem like a smart idea. But these are also seen as a credit enquiry. Getting multiple pre-approvals for a range of credit in a short space of time can also result in a low credit score, and potential rejection of your subsequent loan application.
How To Get A Loan With Bad Credit
At Best Loans First, we believe that everyone deserves a second chance. We offer loans for people with bad credit by liaising directly with the banks and other lenders to find loan opportunities for your specific circumstances. We also work with you to help improve your credit score and make sure you can meet the loan requirements. Even if you have had bad credit problems, it doesn’t necessarily mean your interest rates or fee’s will be higher, we have quite competitive rates tailored for these situations.
Taking out a loan and paying it on time for 12 months is just one fo the simple ways you can boost your credit score back up.
Other tips to improve your credit score:
- ensure you make at least the minimum repayment for all debts you have
- changing your repayment schedule is better than defaulting
- moving house can effect your score, so make important applications prior to moving
- having a fixed home line on your application, rather than just mobile, can show stability
- ensure a consistent address on all active accounts (including phone bills)
- cancel unused credit cards
- use any savings to pay off and minimise debt
- be careful of having ‘joint finances’ even with housemates, as you could be co-scored
Low Doc Loans
If you’re self-employed it can be tricky coming up with the income documents required to apply for many home loans. Luckily, we provide low doc home loans to help people borrow without as much paperwork regarding their assets/liabilities and income.
We also have a range of low doc car loans as well.
What should I be doing?
Be conscious of your credit report and ensure you meet all your credit obligations. If you are considering refinancing in the next couple of years, be aware of all agreements, preapprovals and enquiries you make (where you sign a privacy agreement) as these will generally result in an entry on your credit report. These entries stay on your file for 5 years.
For more information, call Alicia on 1300 419 353 for a free consultation.