We get asked a lot about credit ratings and how this will impact borrowing capacity. It can be very hard for us to provide general responses in regards to these kinds of questions. As mortgage brokers we get asked a variety of things in regards to credit ratings.
Firstly, the issue of credit ratings can be a very hard question to answer. Each bank scores credit differently. Some of the things that banks who undertake a credit score look at are:
1. How long you have been in your job? Is it over 2 years?
2. How long have you lived where you currently are? Is it over 2 years?
3. Do you have a home phone? There is evidence to show that this is important
4. What are your assets in relation to your liabilities?
5. What is your age and what is the value of your assets relative to your income?
6. How many credit enquiries have you had in the last year? A credit enquiry appears on your file anytime you apply for credit anywhere even if it is just applying for a mobile phone. If it is over 4 in a 6 month period, banks don’t tend to like it.
7. Do you have anything on your credit file that is currently outstanding?
There are many different things that each bank class as a credit scoring but the above will give you some indication about what it is that they are looking for. Some will use the items mentioned above and others use different indicators. This means that nothing is definitive or set in concrete. We spoke to a lender once about credit ratings and were told that there are 72 different avenues in a loan scenario that can relate to credit scoring.
The best way to gain an understanding of your personal credit rating is to have a chat with one of our brokers. If you would like to undertake a credit check this can be done through Veda and their website is www.veda.com.au