Buy now Pay later. Think twice!

Buy now Pay later. Think twice!

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The modern push to buy now pay later can adversely affect your credit score. Seriously think twice!

It’s everywhere on the internet. It’s everywhere on social media advertising.

Buy now pay later has become some what of a craze.

It’s a product of a newer generation and a society that want’s everything now.

That can make it difficult to refuse the temptation. Especially when everyone else is doing it, right?

Buyer beware. Don’t rush in so quick.

Those buy now pay later companies do run credit checks.

They will log into your credit report using Equifax. Also know as Veda.

Once that “buy now pay later” application you made is on your credit file, it stays for five years.

Every future lender will see it when they run a credit check on you.

Then when you apply for serious finance down the track it surfaces.

No harm right? Wrong!

Fast money applications, credit card applications and buy now pay later applications are all viewed by major lenders as an indication you may be hard up for funds. Desperate is another description.

That then leads the lenders to think you could be higher risk. Which in turn means a declined application for you or high interest rates if you’re lucky enough.

Steer clear of fast money finance or delayed payment offers. They adversely affect your credit file.

Avoid the urge and attempt to save until you can afford an item. Your credit file will thank you for it.

Even ASIC is concerned. That is saying something.

We see it all the time with clients who have conducted a credit check online and find out that they have a low credit score even though no defaults exist.



Check your Veda credit score

Check your Veda credit score

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Are you like millions of other Australian’s and worried what your Veda credit score may be ?

Recent news has shown millions of Australian’s are too scared to check their credit score, let alone know what their score is. Yet it is not that hard to check your Veda credit score, in fact it is dead easy.

If you ignore your credit score information and do not check your Veda credit score but rather address it only when time comes to apply for finance, that is like a financial ostrich sticking its head in the sand!

Not only do you risk blemishes showing up when you least want them to, but there are literally hundreds of thousand of errors in individuals credit files which go unchecked every year.

Yes it is the responsibility of credit reporting bureaus to maintain accurate data on your credit file but it is only going to be as accurate as the lender who enters it each time you apply for finance. People make mistakes!

It is also the individuals responsibility to check and make sure the information on their credit file is accurate and report any errors as soon as possible to the credit reporting bureau such as Veda Equifax. The only way to do this is check your Veda credit score and report.

You could be costing yourself hundreds or thousands of dollars paying unnecessarily high interest rates on finance or even worse, risk being declined for finance when you most need it.

Recent news articles have highlighted many more important aspects which may have an impact due to credit score negligence.

Feel free to call us or email with any queries you may have and we will do our best to answer your questions.

Bank credit checks – tougher mortgage lending

Bank credit checks – tougher mortgage lending

News

Bank credit checks are going to be tougher and more thorough than ever from November 2018 in Australia

With the advent of investigations into lending practices in Australia and the resultant exposure of poor lending practices, banks are setting new standards with bank credit checks perhaps with a view of reprieve but most certainly as a preventative step to avoid going down the same costly avenue again.

Only this week ANZ changes have hit media headlines announcing tougher lending criteria and much more thorough verification of income, assets and close scrutiny of bank credit checks.

Previously banks would often take what information you provided as being acceptable. Not any more !

In depth analysis of your income and other credentials will play an important role in future mortgage finance applications. In short the banks will quiz you on all data you provide them with, request reliable evidence to support what you give the banks on your application and third party verification of certain information.

One very important aspect, probably the most important, will obviously be your credit history and associated credit file. Bank credit checks will be far more thorough from now on so it would be prudent to make sure your Equifax credit file or Veda credit report is accurate, up to date and accurately reflective of all information you provide on a mortgage finance application.

The time you take to obtain your credit report prior to applying for finance will pay off. Make no mistake, if your credit file does not match your application details, you will be inviting a high probability of declined finance. Get your credit file first and check it ! Ideally acquire your file with a professional assessment outlining any issues which may need addressing.

An interesting bank credit checks article in the Australian Financial Review sums up these important changes.

Credit checks with banks. What lenders look for.

Credit checks with banks. What lenders look for.

News

You’re probably aware by now that it is becoming increasingly difficult to obtain finance within Australia. Under the current financial climate there are problems in Australia for all lenders due to recent findings from the ongoing royal commission. This has made lenders tighten there purse strings, however, you still needs a good credit rating to be successful in obtaining finance so lets look at credit checks with banks.

It’s not all doom and gloom though. Even though lenders are looking closer at applicants background and financial habits, you can still increase your chances by making sure your credit history is tip top. To do that you need to understand what lenders are looking at on your credit file.

Firstly, credit checks with banks are not the be all and end all which determines the outcome. We must understand that there are other important and significant aspects which a lender will consider. Things that you can’t fudge on an application (or shouldn’t) are employment status and length, rental or housing status and length, marital status, age, the area you live in, your assets and liabilities plus many more.

Ensuring all of the above are true, accurate and consistent with what you offer on an application is important. Some of this info goes on your credit file and lenders will cross reference to see if you are being consistent with what you tell them.

Then there is the obvious. Defaults and court actions. No one needs these on their credit file and if they appear during credit checks with banks then you have major issues. Some times these issues can be cleared and sometimes not but we won’t go into that right now. Further info on that topic can be found at Fixbaddebt.com.au.

Make sure there are no duplicate entries. This is a common nuisance which previous lenders cause on your credit history file but is easily fixed and you can do that yourself for free. Simply contact Equifax directly and request info on how to amend basics credit file mistakes. It really is not that hard !

Credit checks with banks do not look good if you have been applying excessively for finance. Too many applications with say the last two years is not good and your credit score will be penalized. Play it safe and keep application to a minimum and importantly make sure you do not apply for “fast money finance” or payday loans. Those applications on your file are considered a sign of desperation which lenders frown on big time.

So in summary check your credit file before applying for finance. Don’t leave it up to a bank to tell you there is an issue on your credit rating. Good luck and feel free to call or email us any questions that we could help answer for you free of charge.