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Your credit score may affect your ability to get a loan!

Did you know that applying for a loan in more than one place can decrease your chances of getting a loan?

Banks like tight, regular movements. Just like a waltz has rhythm and methodical movements, bank like customers who save regularly and plan their movements.

Multiple loan applications give you a profile that is more like a flamenco dance, full of passion which can look less planned out!

Potential borrowers can pick up multiple loan applications without realising and this affects your credit score. Bank look at your credit score when deciding if your application is worth their risk in lending you money. It sounds harsh but really they are just making sure that you have adequate capacity to repay your loan, even if interest rates were to rise.

The idea of shopping around for a loan gets the banks all jumpy and then they may are additional hoops to have to jump through which makes the process a little more complicated which may take more time.

If may feel like adding a back up plan to try different banks or lenders but this can actually against you.

Julia Corderoy in her article in news.com.au this week quotes Luke Keller, CEO of getcreditscore.com.au as saying 'Shopping around is negative behaviour for all credit applications- cards, personal loans and home loans.

It implies that the borrower is higher risk because they are having to go to lots of different lenders to try and get credit.'

You can check out your own credit score by going to getcreditscore.com.au.

Next time we'll talk more about your credit score and what to do about it.

Check out the original article here