Chip of the gray credit card, closeup shot.

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More than ever before, it is so important to manage and look after your Finance Credit File. As you apply for finance ,here are 5 tips to help you get a loan approval and a better Interest Rate from the Banks and Finance Companies.

1. ENQUIRES:   It is paramount that when you are” surfing the net “ for a finance deal, read the fine print because some banks will put an enquiry on your Veda file without you even knowing. Also, if you are looking at getting a good deal, contact a Bank or Saveoncarloans.com.au and get expert advice from us, too many enquiries on your file can actually mean your loan is declined .

Finance Institutions score your application and if you have applied a lot, it will down grade your profile and even score you as a high risk which means you will not get the deal you deserve. So be careful not to apply too many times to save yourself a few dollars ,once an enquiry appears on your Credit File, it will stay there for 5 years.

2. PAY DAY LENDERS : There has been a huge influx of Pay Day Lenders in the last 12 months offering “easy loans” for customers but huge repayments in return. Customers use the funds for a variety of reasons such as car registration, white goods, personal bills and even holidays. The loans are for a short time only, but the repayments paid back to the lender can amount to 500% which is huge considering a personal loan from the bank is around 13%.

Another problem that arises from this is that Finance Companies are now looking at customers Credit Files and if a Pay Day Lender appears in their file , are declining the loan application because of this. In fact two Lenders who finance customers with good and bad credit will not look at any application with Pay Day Lenders if an enquiry appears on their file in the last 6 months , no exceptions!!

3. DEFAULTS: If you have had a loan, mobile phone bill, bankruptcy or a debt that you have not paid, a default may appear on your file. Most defaults will stay there for 5 years and the serious ones can be there for 7 years. So every time you apply for  finance, it will appear on your file which could hinder your chance to get an Approval. If you do have an outstanding loan or debt and you are receiving letters in the mail or phone calls ,make an arrangement to pay it back as a default will give you no end of grief and there is every chance you will either not be approved for a loan or your Interest Rate will be higher because of your poor credit history.

4. SLOW CREDIT: If you have a current loan with a bank or finance company ,one that Saveoncarloans.com.au set up for you ,it is very important that you pay your payments on time .If you are looking at an additional lend or replacing your car, bike, caravan or boat, the lender will get a conduct reference of your current loan or a paid in full loan. If you have a good account, we can negotiate a better Interest Rate for you and a better overall deal. If it is rated slow, it will sometimes mean that it is an instant decline by the Financier or if it is approved, a substantial deposit or higher Interest Rate will apply because of the risk factor.

We always encourage customers to set their loan up as a direct debit on weekly or fortnightly payments so it comes out of their account regularly which will give them an A rated account which will set them up financially for future borrowings.

5. DEBT AGREEMENT: A lot of customers get financial advice from experts encouraging them to go Bankrupt on debts they owe so they will not have to pay the debt back . That may be a good short term fix to your problem , but the long term consequences can be far reaching. The bankruptcy will appear on your credit file for 5 years from the day it was listed which will be an automatic knock out with some lenders but some will approve a discharged bankrupt but at a very high rate as the risk again is high. Saveoncarloans.com.au have been told by some clients that they were told to go bankrupt for $3000 on a debt which may be a good idea at the time ,but it can make their chance of getting a loan later very difficult.

Even after your bankruptcy has been removed from your credit file, some lenders will log into the ITSA website which will has all previous bankruptcy’s on there. That will mean that although the bankruptcy no longer appears on you file, lenders will decline your loan because of your previous credit history.

Clients that make arrangements to pay back their debts are always a better chance of being approved as they are serious about getting their credit rating back on track.

We hope this has helped you understand how Credit files and ratings work , if you have any questions please call our expert team at Saveoncarloans.com.au on 1300 000 326.

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