5 Ways to Protect your Credit Rating

5 Ways to Protect your Credit Rating

Have you ever applied for a loan or credit card through your bank or financial institution only to be declined without a valid reason or because of an adverse event or default on your credit file?

There are many ways that you can protect your credit rating and increase your chances of gaining the finance approval you are looking for on your next loan application. The key to getting the best finance approval is to make yourself look as attractive as possible to finance companies and lenders. Not the dressing up and putting on cologne, attractive – but there are definitely things you can do yourself to improve your credit score and overall profile.

So what do banks and finance companies look at when assessing a loan application?

Banks and finance companies look at a multitude of variables when determining your suitability for a finance product or loan. The single most important factor assessed is your ability to repay the loan you have applied for. Each lender has set regulations regarding what they assess ‘living expenses’ to be for each living situation (single/married/dependants). They will assess your income versus your outgoings and expenses to make sure that you are not going to be put into a financial hardship with the addition of the loan. To get an idea of what your expected repayments will be on your loan, visit our Online Loan Calculator.

When assessing an application, finance lenders also look at contributing factors such as your previous financial repayment history including your credit history, also known as your Equifax Credit Report and Score, your current employment and residential status, including the stability of both and whether you are a home owner/buyer. Depending on the type of finance you are applying for, they may also assess the asset you are purchasing to use as collateral for secured finance.

What can I do to protect my credit score and make my application for finance look more attractive to lenders?

  1. Don’t let debts get recorded on your credit file

    Make sure all of your current bills and debts are paid on time, every time. If you are having trouble making payments on your debts, consider contacting your individual debt companies to arrange payment plans or terms that better suit your situation. If you can’t come to a suitable arrangement with your lenders, consider debt consolidation to help manage your debts and combine them into one single, affordable repayment. Keep in mind that even bills, such as Optus or Telstra phone bills and utility bills such as energy or water bills can be recorded against your credit file if you don’t pay them and may make it hard to get finance in the future.

  2. Stay informed, check your credit file regularly

    You can access a copy of your Equifax Credit File once a year for free. This lets you keep track of your credit enquiries, see any defaults or judgements you may have on your file and protect yourself from identity theft crimes. To obtain a copy of your Equifax Credit File, see Check My Equifax Credit File.

  3. About to move house? Make sure your bills don’t get left behind

    Before you move house, make sure you contact all your credit providers including your bank, phone company and utility providers to update your address so you don’t miss bills. Alternatively, most providers offer the option to email bills, so you can set your bills to send to your email address instead. Australia Post also offers Mail Redirection Services to help Australians move house and not lose any of their mail.

  4. Shop around for finance, without ‘shopping’ around

    It’s always a good idea to shop around to find the best possible deal for you, whether you’re looking for new shoes, a new car or even finance. The problem with shopping around for finance is that each time a finance company assesses an application for finance on your behalf, they put an enquiry on your credit file. The more enquiries you have on your credit file within a short period of time, the more uneasy lenders become about lending you money, it’s a catch 22. Thankfully, there is a simple and efficient solution that ensures you get the best possible finance approval without congesting your credit file with a multitude of enquiries. At Approved Car Loans, we have established relationships and accreditation with over 30 leading lenders throughout Australia and compare their products on your behalf to get you’re the best possible finance approval.

  5. Protect your loans and your credit file

    Traditionally if you were to fall behind in loan repayments because you lost your job, have fallen ill, received an unexpected bill or for numerous other reasons, there’s not much you can do to stop a finance company from repossessing your asset and potentially defaulting your credit file. This leaves you with a blemish on your credit file which makes it very difficult to convince future lenders that you have the ability to repay a loan. Luckily Approved Car Loans offers Protected Loan Packages that can take away some of the uncertainty and give you confidence moving forward. You can apply online with Approved Car Loans in 4 easy steps, or call our friendly staff on 1300 4 CAR LOANS (1300 422 756) for an obligation-free chat about your finance options.

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Tags: Approved Car Loans, Protect Your Credit Rating, Equifax Credit Report, Protected Loan Packages

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