Credit scores are a financial grade that banks and other lenders use to work out whether to give you a loan.

If your credit score is lower than 600 you will usually be rejected, but this changes from lender to lender as they all have their own criteria.

Sometimes lenders relax their criteria and approve higher risk applications and at other times, like now, they tighten up their lending and are much stricter about who they lend to.

The bottom line is, the better your credit score, the more likely you are to be approved for a loan.

But what factors lead to a great credit score?

No Defaults

If you have a default (overdue account) on your credit file this will significantly lower your credit score and you will very likely be rejected for finance.

No Court Actions

If you have a court judgment on your credit file, it’s as bad as having a default. Judgments become public information, and this is added to your credit file.

No Negative repayment history markers (RHI)

If you have been late with any payment on a banking or finance loan in the last 2 years it will show up on your credit file as a number next to the particular month you were late in paying. This lowers your credit score and makes lenders nervous about lending to you.

Low number of recent loan applications (enquiries) 

If you have submitted more than 5 loan applications in the past year or if you have applied to high-risk lenders (think fast cash loans) in the last 5 years this will lower your credit score and make a new lender less likely to provide you with more credit. 

No bankruptcy or debt agreements

If you have entered a part 9 debt agreement or have been forced or have willingly become bankrupt this destroys your credit score for 5 years as that information becomes public and is added to your credit file.

Do not despair at this point!

There are options available to increase your credit score without having to wait out the 5 years that most paid or unpaid listings remain on your credit file. Defaults, judgments, enquiries and RHI can be questioned and in many cases erased from your credit file which will improve your credit score immediately.

As a part of Solve My Debt Now’s services, we can help contacting your creditors to address these marks on your credit score. Call us now on 1300 070 672 or send us an email to help@solvemydebtnow.com.au to see if our services are right for you.

If you are worried about your current credit situation, you can order all of your credit files for free by following these links:

1. Equifax: https://www.mycreditfile.com.au/products/equifax-credit-report-formerly-known-my-credit-file

2. Illion: https://www.creditcheck.illion.com.au/

3. Experian: https://www.experian.com.au/order-credit-report 

We Can Help You – Today

Book your FREE Consultation now and talk to one of our qualified SMDN Advocates to see if we can help. It just may be the call that helps put you back on a better track with your credit file!