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Fact Sheet: Improve my Credit Score / Rating

What is it?

Your credit score is a automated computer generated assessment of the risk of your loan

application and of how risky you are to a creditor. For us, this means how risky your home

loan application is to a potential lender. Your credit score is calculated entirely by computers

using information from your loan application and credit file without any human input.

In Australia it is specific to each lender. In other words, your credit score will be different

depending on which lender you apply with. Your score will result either in your loan being

approved, declined or referred to a credit officer for manual assessment.

Why did I fail credit score? Many loan applications these days are declined due to a number of different reasons, the most

common and hardest problem to get around is due to a low credit score from the lender and

not meeting their minimum credit score for approval.

The most common causes for a failed credit score include:

� Bad credit history.

� Lack of genuine savings.

� Instability of address or employment.

� Missed or late payments.

How can I improve my credit rating? In most cases there are two or three

aspects of your application which are

causing you to have a low score. The first

step is to identify what is causing your loan

to fail the bank’s credit score. By rectifying

these problems you can improve your score

and apply for the loan again. If you fix the

wrong aspect of your situation then you’ll

waste a lot of time for little result. If you

have problems with your credit file then you

can talk to credit repair experts who can

help you remove defaults that were

incorrectly or unjustly lodged on your file. Once you have fixed up any problems you can work

on aspects of your situation that can improve your credit score, and in doing so you will

maximise your chances of getting your home loan approved.

Fix the problems � Don’t overdraw your cheque account.

� Don’t go over the limit on your credit cards.

� Pay off as much as possible off of your credit cards.

� Make all of your repayments on time.

� Pay all of your debts on time, every time.

� Pay any defaults on your credit file & if possible wait for them to be removed.

� Apply for a lower loan / LVR (Loan to Value Ration)

� Leave no blanks on your loan application form

L o a n W i z e – W i z e U p t o y o u r B e s t F i n a n c i a l D e c i s i o n

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Improve your score � Apply for a $500 credit card for the lender you will apply for a mortgage with, and ensure you

pay it on time.

� Don’t apply for loans that you don’t need. You want to minimise the number of enquiries on

your credit file as large number of enquires results in a negative score.

� Stay in your current address & job for as long as possible as stability is great for your score.

� Open a savings account and save as much as you can.

� Low % of limit on credit card used

� If you have a low asset position for your age, ensure you tell the story why (i.e. just went

through a divorce)

When you apply for your mortgage � Apply with a lender that has a softer approach to credit scoring.

� Always put the strongest applicant as the first applicant.

� Include all of your assets in your application such as you cheque account, savings account,

furniture, car, superannuation & shares.

� List all the cash in bank accounts separately on the loan application with their balances –

even if there is only a $10 balance. Always include the full bank account details.

� Always enter superannuation and include the Super Company name & current balance.

� Ensure you put “home duties” for stay at home mums / dads instead of unemployed

� Any funds available in redraw facilities should be entered as savings in your Asset &

Liabilities statement.

� Always list a home phone number (use mum & dad’s if you don’t have one)

� Include contact details & phone number for your employer

� Don’t borrow to your limit.

� Assets should be higher than

� Be careful with your loan purpose, some are not accepted.

In some cases it may be easier to approach a lender who does not use credit scoring to get a

loan.

Which lenders use credit scoring? While the majority of Australian lenders use

credit scoring, there are still a few that do not.

Even if your circumstance has resulted in

having a bad credit history, we know which of

these lenders would be most likely to approve

your loan application. In other cases it is a

matter of applying with a lender that will score

your situation more favourably. For example

some lenders are more concerned about your

stability so will not accept people in a new job, whereas others will accept someone in a new

job but not somebody with defaults.

At Loan Wize, we understand that there is no ‘one size fits all’ lender, and that everybody’s needs are as unique and as individual as they are. We listen to you and tailor our recommended solutions to your individual circumstances. So if you think you would like to know more about improving your credit score and which lender may be right for you, call and discuss your situation with a Loan Wize Professional Lending Specialist today!