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Importance of credit report/rating?

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Hello,

Just wanted to know how important your credit rating in your credit report was when borrowing money from a bank to buy a house?

I always assumed that having 10% deposit was the standard and good enough, but would they still lend you the money if you had poor credit rating? Extremely poor?

Or if you had 50% deposit, would they still lend you money if you had a shameful credit rating?

Also, anyone know if we can get a credit report for free?
 

Bill M

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Re: Importace of credit report / rating?

Hello,

Just wanted to know how important your credit rating in your credit report was when borrowing money from a bank to buy a house?

I always assumed that having 10% deposit was the standard and good enough, but would they still lend you the money if you had poor credit rating? Extremely poor?

Or if you had 50% deposit, would they still lend you money if you had a shameful credit rating?

Also, anyone know if we can get a credit report for free?
Last year I wanted to go from pre paid to post paid and global roaming on my mobile. In order to do that they ran a thorough credit check on me. Had I have had a bad credit rating I wouldn't have got it so I think a home loan could be out of the question.

That incident got me thinking so I applied to view my credit rating at this online company, they were free too. http://dnb.com.au/

The free report takes 10 business days to come through.
 

Knobby22

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Re: Importace of credit report / rating?

If you have a poor credit rating or poor work history you will not be ableto access the cheapest loans such as through ME bank. THey will simply refuse.

Banks such as Westpac will give you the loan but without any discounts which are normally 0.8% at present. So you will be forced to pay a higher rate in effect.
 
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Re: Importace of credit report / rating?

Hello,

Just wanted to know how important your credit rating in your credit report was when borrowing money from a bank to buy a house?

I always assumed that having 10% deposit was the standard and good enough, but would they still lend you the money if you had poor credit rating? Extremely poor?

Or if you had 50% deposit, would they still lend you money if you had a shameful credit rating?

Also, anyone know if we can get a credit report for free?
To be honest, I have no idea how important the credit rating was when my late wife and I borrowed to buy our home (which I am still in by the way.) However, that was when home mortgage rates were regulated and were a little hard to get unless you displayed a savings pattern. So I suppose that was, effectively, the credit rating system used at that time.

Doubt whether such a regime would be welcome now by the general populace.

As for now, probably it depends on how much risk the lender thinks you are worth to it.
 
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Re: Importace of credit report/rating?

Thanks all for the quick responses.

Just wondering with the DNB one, do they use your details for other purposes, like sending you advertisements? I'm just a little concerned at providing my details online :eek:
 

Bill M

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Re: Importace of credit report/rating?

Thanks all for the quick responses.

Just wondering with the DNB one, do they use your details for other purposes, like sending you advertisements? I'm just a little concerned at providing my details online :eek:
The DNB one was the one the phone company used on me so that's why I made a separate enquiry on myself. I did mine 1 year ago and I have not received any junk mail or advertisements at all, they seem to be very professional.
 
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It was always my understanding that a credit rating was sought by banks, mobile phone carriers etc in cases where no "security" was held - such as personal loans and consumer finance. Most banks were far less likely to run a credit rating check where they have adequate freehold security for the debt. This may have changed over recent years of course. :2twocents
 

white_crane

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Came across this situation just the other day. The loan specialist wouldn't put in an application because I had already made one application with another institution (that I was potentially looking to cancel) and it would look bad on my credit rating to have another (if I didn't follow through with this one).
 
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Came across this situation just the other day. The loan specialist wouldn't put in an application because I had already made one application with another institution (that I was potentially looking to cancel) and it would look bad on my credit rating to have another (if I didn't follow through with this one).
Wow, even applying for things and not following through affects your rating???
 

white_crane

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Wow, even applying for things and not following through affects your rating???
This is how it works...I think

When you put in an application, it puts a flag in your credit report. If you put in several applications around the same time, it makes it look like you were a bad prospect and that you just kept on applying until someone gave you a loan.
 

white_crane

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Further to above, your file does not actually have a credit rating - each lender has their own method of working out your credit rating based on the information contained in your file (which includes all applications for credit/lending).
 
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Further to above, your file does not actually have a credit rating - each lender has their own method of working out your credit rating based on the information contained in your file (which includes all applications for credit/lending).
Oh I see, I thought there was some sort of centralised system that rates everyone, and then banks just go to this system to check.
 

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