If you want to obtain a loan, it’s important to separate fact from fiction when it comes to your credit history. A large part of our job here at Optometry Finance Australia is to guide and help you understand the importance of maintaining a ‘clean’ credit file, and to find ways to help you gain the financial assistance you need to obtain car finance or other loans.
If you are wanting to secure a car loan, for example, and are concerned about your credit history or you know or suspect you have a ‘black mark’ against your name, speak to one of our team today. For a free copy of your credit report and follow the instructions that will guide you to obtaining your full report.
Car finance and what you need to know about your credit report
Your credit report lasts for five years and can be accessed by any company to whom you have applied for a loan. A “serious infringement” will remain on your credit report for seven years. However, if the debt has been paid this will revert to five years.
What gets logged and can impact negatively on my credit history?
- Defaulting on loan payments
- Late payments of bills
- Multiple loan applications (whether you take the loan out or not)
- Any of the above for a person for whom you co-sign
Individuals and families looking for a loan or car finance are often surprised to find that they have a poor credit rating, especially if they feel they have been financially responsible and never defaulted or made a late payment.
At Optometry Finance Australia our priority is helping you to secure the loans you need and, if necessary, getting you back on track if you do have a poor credit history. If you are seeking car finance or another type of loan, a poor credit history does not necessarily mean the end of the line.
We are accredited with a number of lenders that will consider applications from customers with credit impairment. For a personal service, contact our office on 1300 OPT FIN to find out how we can help you. Whether you are just looking for information or need us to guide you through the process to obtain the best loan for your situation, one of our team will be happy to help.
Fact versus fiction for credit history
1. Fact or fiction: the best way to compare loan fees and interest rates is to submit a loan application.
This is not true and can, in fact, be damaging to your credit file. Every time you submit an application for finance, whether you take out the loan or not, a notation is made on your credit file. Lenders consider six or more loan applications in any one year to be excessive. The best way to avoid this is to ensure that you do your research on loan fees and interest rates before you complete an application. This information is readily available and will give you everything you need to compare lenders.
It is also important to ensure that all of your details are completed accurately on any loan application. Incorrect name spellings or missed digits in your drivers licence number, for example, can result in multiple credit files being created in your name.
2. Fact or fiction: I have a good credit history because I pay all my loans on time
This is a great start but it is not the entire picture. Defaulting on loans or failing to pay bills on time (including utility bills) can impact negatively on your credit history and can directly affect applications for car finance or other loans.
3. Fact or fiction: my credit card limit has been raised so I must be able to afford it
Lenders make money from interest payments on outstanding loans and on fees for credit cards. They are not out to ‘get you’ but at the same time they are a business and businesses have to make money. Raising your limit is often for their benefit, not yours. With a higher limit you are more likely to spend, and the more you spend the more difficult it may be to pay it all off on time.
4. Fact or fiction: I always pay off my entire credit card bill each month so I will have a good credit history
Some lenders look at how close to your limit you spend and, regardless of whether you pay it all off each month or not, reaching your maximum limit every month can be risky.
Can I ‘erase’ a poor credit history and secure the car finance I need?
Your credit history remains on your file for five years (or seven if it is a serious infringement and has not been paid off). However, proof of good conduct after bad will go a long way to proving to potential lenders that you have improved your ability to meet your loan repayment responsibilities.
You can also consider contacting your credit provider (or utility or telecommunications provider, as the case may be) to negotiate paying off the debt.
You may also be able to consolidate all your debts into one in order to pay off your debts faster.
The laws in Australia require that a lender must update the listing on your credit file as soon as is practicable, once the debt has been paid.
There are also companies in Australia that can repair an individual’s credit file, for a fee.
At Optometry Finance Australia we are very careful to ensure that we have a good overview of your credit history before making a loan application on your behalf. It is part of our responsibility to you to ensure that we help you get the results you need. Speak to one of our team today to find out how we can help you.
Whether you are looking for car finance or other loans, we will walk you through the process to give you the best chance of success. At Optometry Finance Australia we have lenders available to you who will still consider your circumstances even if you do have a poor credit history.
Contact our office on 1300 678 346.