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Re: Do late repayments affect credit score that much?

Posted: Tue Oct 01, 2019 8:42 pm
by Otto Dargan
Hello Jess. Welcome to the forums.

Comprehensive credit reporting (CCR) was implemented in Australia from July 2018, under which your credit file/ report also shows your ‘repayment history information’ for the last 24 months. So, if you’ve had any late repayments these get recorded which in turn negatively affects your credit score.

That is only if you’re late by more than 14 days or two weeks, they’re recorded on your file. If repayments are overdue for more than 60 days then they’re listed as defaults.

Too many credit enquiries also negatively affect your credit score. We usually recommend keeping credit enquiries to 2 or less six months prior to applying for a home loan. The good news is credit enquiries do not affect your score for long as they usually do not have a significant enough impact after 12 months.

CCR has both benefits and drawbacks for borrowers.

Our mortgage brokers can access your credit report without leaving a credit enquiry and do a full assessment. We have lenders on our panel who can consider a few adverse credit listings and offer competitive home loans.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify.

Cheers,

Re: Do late repayments affect credit score that much?

Posted: Wed Oct 02, 2019 12:49 pm
by Otto Dargan
Hi Jess,

That’s true. Positive credit reporting or CCR has both benefits and negatives. The main negative is that previously lenders were only able to see if you had defaulted on a loan, however, now they can also see if you’re making regular repayments on time. That means a temporary change in financial circumstances can negatively affect your credit score.

However, at the same time, people with bad credit can benefit from positive credit reporting as they are now more likely to be approved by a mainstream lender if their last 2 years repayment history information is perfect.

So, there are both winners and losers when it comes to home loan approval.

Cheers,

Re: Do late repayments affect credit score that much?

Posted: Wed Oct 02, 2019 7:35 pm
by Otto Dargan
Hi Jess,

To improve your Equifax score, there are a few simple steps you can:
  • Get your credit report and check to ensure all the data is correct. You can get a free report by directly contacting Equifax. If there any discrepancies ask them to fix it.
  • Avoid applying for any more credit.
  • Pay all your bills and debts on time.
  • Avoid moving address or employer unnecessarily.
  • Avoid applying for credit with less reputable lenders like payday lenders.
Keep in mind that improving your Equifax score is different to improving your credit score with a particular lender. Equifax only looks at your credit file whereas a lender is looking at all facets of your home loan application. Another tip is to open an account with the lender you plan to apply for a home loan with.

There is more to getting approved for a home loan than just your credit score. Our specialist mortgage brokers are experts in the policies of almost 40 lenders on our panel.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan.

Cheers,