Will my poor credit score affect my mortgage application?
When assessing your mortgage application lenders consider a number of factors, including your credit score. Your credit score health helps lenders to determine of your interest rate and the eligibility of your application. So, what exactly is a credit score and how does it apply in Australian lending? Your credit rating is based on your credit report, previous borrowings, repayment history, credit applications and outstanding debts. Your credit score is a rating from 0 to 1,200 that indicates you as Excellent, Good, Average or Below Average based on these factors.
Can a poor credit score affect my application?
Unfortunately, your credit score can affect your application. The increased level of risk indicated by your credit score can result in a lower amount of lending than desired, higher interest rates or potentially disabling them from lending to you altogether.
I have a poor credit rating, what can I do to increase my credit score for my loan application?
If you have a poor credit rating, you can increase your chances by improving it before you apply. Any rejections of credit will be filed on your credit report and work against you in reapplying.
So what can I do?
- Apply for a home loan when you have increased your financial stability
- Create a clear budget to pay off any outstanding debts
- Talk to a mortgage provider to improve your chances of home loan approval
You can check your credit score for free online by Australia’s largest reporting agencies including Equifax, or have one of our friendly consultants do it for you. Call us today to discuss your personal credit rating and how it affects you.