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We have put together some of the most commonly asked queries. Of course, these are general answers, which don’t take into account your specific circumstances and should not be taken as financial advice.
Applying for finance
- Keep all inquiries to a minimum (less than 3). Most finance companies will decline loans after 3 inquiries; they don’t like a busy credit file.
- Always make sure you supply the correct information (including any current credit).
- Normally lenders will want 3 years’ job and residence history, drivers licence details, date of birth, current address, payslips, and proof of current address. However, some of these things will only be required at sign up once the loan has been approved. Failure to provide them could result in the finance not proceeding.
- It always helps to apply for finance before changing your job or residence, not after.
Defaults
“If I have defaults does this mean I won’t get a loan?”
The short answer is NO – but it does make it harder and limits the lenders that we can put it to. It will depend on how many defaults and with whom (i.e. utility defaults or finance company defaults). How long you have been in your residence is also relevant (as finance companies dislike instability). In the eyes of the lender, instability can lead to defaults. If you do change address always notify the lender, phone company and public utility etc. as this will help to ensure you don’t miss bills and will alleviate problems down the line. Once a default is on your credit file it will stay there for five years whether it is paid or unpaid. If you have defaults on your credit file you should pay those as soon as possible, lenders like to see that where there was a mistake or problem you fixed it quickly
Loan Repayments
If at any stage you have trouble paying your loan always keep the finance company informed. Good communication makes a difference. Discuss the matter with the finance company and they may be able to help, for example by extending the loan, lowering the repayments or offering you other terms.
Tips for a Good Credit Rating
- Always pay your loan on or before the due date. If you have a credit card with a limit of $500 and it’s due on Monday and you pay it on the following Thursday (because that’s when you get paid) that will give you a bad credit rating – so always make sure make your payments on time.
- A loan should run for at least 12 months to establish a sound loan history.
- If you combine these factors you will be well on the way to having good credit.
- At Tinyhousefinance.com.au we aim to get you the most competitive loan based on your personal circumstances and financial behavior from our panel of lenders.