Why is a Good Credit Rating Important in Australia?
- Author Ray Ethell
- Published January 14, 2023
- Word count 353
When you lodge an application for a home loan, the first thing your bank will do is to check your credit score. A credit score or credit history is basically a result derived from the analysis of a person’s credit files.
When you lodged your application for a home loan, the bank will evaluate you in terms of your ability to repay the loan on time based on servicing and previous history. For this, they do a complete analysis of your income, on-going mortgages, assets and take into account many other factors to assess you. This will provide the banks and other non bank lenders a clear picture of your risk status. If you try to borrow money with bad credit from a Bank, it is very likely that your application will be rejected.
Reasons for Bad Credit History
A person may end up with a bad credit score due to a number of reasons. Laziness in paying the bills, poor financial situation and overspending are some of the major causes of bad credit. Different lenders have distinct methods of assessing a person’s creditworthiness. A bank can deny the application of an individual requesting to borrow money with a bad score as per bank’s policies. To improve your credit score, you can talk to a debt consolidation firm for easy repayment options.
Home Loans with Bad Credit
Having bad credit does not disqualify you obtaining a home loan. You can still borrow money with bad score with the help of a Non Conforming Lender.
A Non Conforming Lender will analyse your financial records and grant you loan on certain terms and conditions.
The applicant applying for the loan would generally need to pay a higher interest rate and costs than an individual who has a good credit rating.
If you own a home you can borrow money with poor credit to consolidate your debts, since your asset will be used as collateral. This is called a secured loan. If you do not own an asset, then you still may qualify for an unsecured loan which is subjected to specific conditions.
Ray Ethell offers a wealth of experience to his clients, gained from 20 years in the Finance industry, and prides himself on providing reliable customer focused service. Non Conforming Loans specialise in non bank lending solutions such as bad credit home loans.https://articlebiz.com
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