Published at: 6/21/2016 3:28:59 PM
Your credit record can be a deal breaker when it comes to securing your first home loan.
You’re ready to apply for a loan - you’ve gathered the necessary paperwork like pay slips and statements of savings accounts. But there’s one crucial piece of the picture missing, and that’s your credit record.
A picture of how you manage credit
When you apply for a home loan, the lender will want to see how your ability to handle credit stacks up, and that’s exactly what a credit record shows.
Most of us have a personal credit history maintained by various credit reporting bodies (more on these shortly). It shows basic details like your name, age and address, and it can also feature information that helps lenders decide what sort of credit risk you pose including details on personal bankruptcies, outstanding debts and even unpaid bills.
Check your credit record for free
The good news is that you can pick up a copy of your credit record for free by contacting credit reporting bodies including Veda, D&B and Experian. If you live in Tasmania contact the Tasmanian Collection Service. It’s a step worth taking because any black marks on your credit record can see your loan application knocked back.
Reviewing your credit record can also be a money saver. ME home loans are free from application fees (solicitor, valuation and agent fees may apply)but most lenders do charge application fees - often running into hundreds of dollars. If your application gets a thumbs down chances are you’ll lose your money.
What if there’s a problem?
There are options available if it turns out your credit record has a few dents. If any outstanding bills are noted, contact the provider and ask about a payment plan to help clear the debt. If the report contains any errors, contact the credit provider immediately to explain the situation.
As a first home owner, choosing a loan with a competitive rate is a smart move. Making yourself an attractive proposition to lenders by having a good credit record is equally important. That’s why getting to know your credit report can provide a real confidence boost when it comes to negotiating for your first home.
Credit criteria, conditions, fees and charges apply.