Credit report

SBS language | How will my credit report affect my chances of getting a home loan?

May PERAan’ is SBS Filipino’s podcast series featuring financial experts seeking to answer the most common questions about money and finances.

“Even if you have the best income and you have a lot of savings, there is always this fear of having [rejected] for a home loan”, explains Maria Papa, financing broker.

She shares that one thing potential buyers tend to overlook is their credit report.


Strong points

  • There are three credit reporting agencies in Australia.
  • Your credit score is included in your credit file.
  • You can request the removal of late payments from the report for compassionate reasons.

Maria shares the following things you need to remember when it comes to your credit report:

1. There are three credit reporting agencies in Australia.

These include Ilion, Experian and Equifax. You can request your free credit report from any of the three.

“They keep an eye on your credit history – if you take out a personal loan, a credit card, apply for utilities…these become historical entries. Every time you apply for a loan from a bank, this is a credit inquiry and will be included in your report.

“If your credit report has 20 inquiries in five years, that’s too much movement.”

2. Your credit score is included in your credit report.

Your credit score is a reflection of what is contained in your credit report.

“When you’re behind on your utility or credit card payments, it’s reflected in your score. [between 0-1000 or 0-1200]. You get a ‘1’ when you are 29 days late, a ‘2’ when you are 59 days late. Every time there is a late payment, your credit score goes down. The bank will see it on your report.”

According to Maria, the 4 major banks [Commonwealth Bank of Australia, Westpac Banking Corporation, Australia and New Zealand Banking Group, and National Australia Bank] are very particular when it comes to your credit report.

A credit score of 0-600 is bad, 600-800 is average, and above 800 is considered very good.

“You’re more likely to get a loan if you’re between average and very good,” Maria shares.

3. You can request the removal of late payments from the report for compassionate reasons.

“There can be a very good reason for late payments,” Maria shares, adding, “Especially if you’ve been fired or laid off due to the pandemic. If this is the case, you can ask your bank to remove the late payments. of your report for humanitarian reasons.”

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Disclaimer: This article is for general information only. For specific financial advice, you should consider seeking independent legal, financial, tax or other advice to ascertain how the information herein relates to your particular situation.

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