Is my credit score too low?
Don’t worry, if you take the right steps then you can actually increase your credit score.
Before you continue you should read about the common causes of a low credit score.
Is there a shortcut?
Do you actually need to increase your credit score?
Some Australian lenders do not use credit scoring to assess mortgage applications!
Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will let you know if you qualify for a home loan.
How do I raise my credit score?
The first step is to identify what is causing your loan to fail the bank’s credit score.
You’ll find that fixing the weaknesses of your situation is more effective than improving your strengths.
If you fix the wrong aspect of your situation then you will waste a lot of time and not get much result.
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 your credit card debt as much as possible.
- Pay all of your debts on time, every time.
- Pay any defaults on your credit file and if possible wait for them to be removed.
Improve your score
- Apply for a $500 credit card for the lender you will apply for a mortgage with and 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.
- Stay in your current address and job for as long as possible.
- Open a savings account and save as much as you can.
It will take time for your score to increase
Your score is made up of raw data from a number of credit providers including banks, credit card and mobile phone companies.
Add to that delays in sharing this data, it may take a while for your credit score to improve.
How do I know if my credit score has improved?
Consumers are eligible to receive a copy of their most recent credit file for free once a year.
It is a great way to identify what information has positively-affected your credit score and it also gives you the opportunity to identify errors.
You are not provided with a copy of your credit score along with your report!
Luckily, you can sign up with the following websites to receive a free copy of your credit score:
In exchange, your details will be used for the purposes of marketing products and services to you but, don’t worry, you have the option to opt-out.
When you apply for your mortgage
- Apply with a lender that has lenient credit scoring.
- Include all of your assets in your application such as you cheque account, savings account, furniture, car, superannuation and shares.
- Don’t borrow to your limit.
- Be careful with your loan purpose as some are not accepted.
Which lender should I apply with?
There isn’t much point in opening a credit card with a lender to build a history with them, if that lender would never approve your loan anyway!
By speaking to our mortgage brokers you can find out which bank is likely to help you and then you can begin to build a history with them.
We are specialist mortgage brokers who understand the credit scoring systems used by the banks. Please call us on 1300 889 743 or enquire online and we can then help you to improve your credit score and apply with a lender that can accept your situation.