Protecting your credit file
With banks tightening up on their credit criteria, it is more important than ever to take great care of your credit file. Credit issues that the banks would overlook in the past are no longer being overlooked.
This month I will briefly outline issues relating to your credit file and how you can best protect it.
What is a “credit file”?
Your credit file is basic credit data recorded by Veda Advantage, a credit reporting agency. Your credit file will include information such as;
In addition, a credit file also contains information such as;
How do you start a credit file?
When you apply for credit for the very first time the creditor (ie, the bank or mobile phone provider) checks the Veda Advantage database with your drivers licence number, name and address etc. If there is no current record either because this is the first time you are applying for credit in Australia or you have been overseas for 5 years or longer and have not applied for credit in that time, then a credit file will be created with these details and a note recorded that on x date you applied for credit with x lender.
What does a credit file look like and how can I get a copy?
You can see a sample credit file here: http://www.vedaadvantage.com/dotAsset/508887.pdf
To get a copy of your credit file give us a call and we can arrange for free. Otherwise, you can go to http://www.vedaadvantage.com.au/personal/mcf/my-credit-file.dot and either order a copy for free (normally a 2 week wait) or pay and you will receive immediately.
What are banks looking for on a persons credit file?
The bank is checking your credit file to see if there are;
Most of the above are fairly self explanatory – the bank is looking to see if you have had any credit issues to determine whether they will loan you money to buy your home.
Excessive credit enquiries:
As noted above, every time you apply for credit a listing goes on your credit file to state you have applied for x amount from x lender. The file does not state whether you actually took that credit, only that you applied.
Issues arise when you apply for too much credit and the general rule for mortgages is no more than 5 credit enquiries in the last 6 months for the same thing. Personally, I would keep this to 3 maximum.
The issue is that if MAP Bank gets an application from John Smith, MAP will check the credit file to confirm clean credit, no bankruptcies etc. If MAP sees that John Smith has applied to CBA, Westpac, ANZ, NAB, St George in the last 6 months for the same mortgage, MAP Bank may become concerned with the status of those previous applications. Were these applications taken and credit advanced and if so, why was it not disclosed on the home loan application to MAP? Alternatively, were these loan applications declined and if so, why? If 5 banks have said no to finance for this applicant, MAP Bank is hardly going to be inclined to say yes.
It is therefore very important to treat your credit file with great care. I have seen loans declined for trivial amounts – an $80 mobile phone bill unpaid where the applicant moved house and the phone company failed to forward on the bill. Another client was declined for excessive credit enquiries not realizing that every time she entered her information online for a car loan a credit enquiry was being created for each one.
How do I protect my credit file?
My credit file has issues, how can I repair it?
MAP has access to a company specializing in credit history repair. This company boasts a success rate of 80% for removing paid and unpaid defaults and 60% for removing excessive enquiries.
Any questions or comments please email or call.
DaniellaWorking with Michael was an absolute delight.
I was a first home buyer and couldn’t think going anywhere else. Highly recommend to go through MAP home loans.He was quick to respond to all my queries, managed to get the loan approved under a strict timeline and I was very impressed. Michael also followed up with me once I settled, I truly appreciate all his hard work to make this happen.
Adnan SharafatI am very thankful to Michael for my primary property construction loan. I approached many mortgage agents for the loan amount as desired, but they could not process because of my overseas profile.
I am an Australian PR holder, based in Dubai and after reading online reviews of MAP loans, I approached to Michael where he completed my construction loan process very confidently even, I did not feel that I am living in different time zone as he was always available for my queries.
Michael also helped for my investment property loan, and again he did awesome job and completed the loan approval process in less than a month. I would like to strongly recommend him for the home loan services with no hidden cost and surprises.
All the best Michael in your future success 😊
PeterMy wife is on a 820 visa and Michael helped us get a home loan. He was a great with communication and answered all of my questions. Recommended if you have if you have issue surrounding temporary visas or you just want a great mortgage broker.
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