Is There a Credit Report Specifically for Home Loans?

Credit reports are a critical part of the loan application process. Borrowers need to provide lenders with as much information as possible to show that they are good borrowers and can be trusted to repay a loan. But is there a credit report specifically for mortgages? And what should you do if you find an error on your credit report? How do you fix bad credit? Keep reading to learn more.

A credit check is almost always required as part of a lender’s loan approval process. In Australia, there are three credit reporting bureaus operating: Equifax, Experian and Illion. These agencies collect and analyse information about an individual’s credit transactions; including taking out and repaying debts. Typically, lenders focus on the number and types of debt the applicant has borrowed in the past and whether they made repayments on time.

If you want to get a mortgage, it’s a good idea to check your credit report first. You may obtain a free copy of your credit file once a year from one of the three credit reporting agencies by filling out an online form or calling them on the phone. While the credit report will not mention your credit score, it will contain information about the factors that influence it. Credit incidents that have had a positive or negative impact on your credit score must be recorded by the three credit reporting agencies in Australia.

While lenders prefer to approve individuals with excellent credit, they are not prohibited from rejecting your house loan application simply because you have a bad score. They may request further proof of your capacity to repay the loan, pay a higher deposit, or charge you a higher interest rate, however they cannot simply refuse your application. If you’re looking for ways to prevent an undesirable loan offer, consider improving your credit score before applying for a home finance. You might lower or combine other debts or postpone paying off an existing mortgage if you’ve taken one out.

Credit reports comprise of credit products such as loans and credit cards, in addition to your bill-paying history. When you open a new utility account, like with a cellphone or power company, it will show up on your credit report. Most people have some form of a credit report – even if they’ve never had any other type of credit before.

Following that, you may focus on keeping up with your payments and boosting your credit score. However, you should avoid applying for credit too frequently, particularly if an application has been denied. Every credit application is recorded by the three credit rating agencies and can have a negative impact on your credit score. Applying for several loans or cards might raise doubts about your financial responsibility that only get worse over time.

Some little lenders may provide loans without requiring a credit check, but they may charge you significantly higher interest rates or give worse loan terms. Make sure you’re only applying to a company that has an Australian credit license. If you take out a loan from a lender who doesn’t have a credit license, your borrowings and repayments will not be reported to the credit bureaus.

If this were the case, then all your hard work building a credible credit file would go to waste. You can also inquire with home loan lenders about what score range they find acceptable and see if they offer another type of credit that could help you get started, like a personal loan.

If you have bad credit, don’t despair! Clear Credit Solutions can help you to boost your credit rating by removing credit defaults and negative listings off from you credit file. We’ll work hard on you behalf and make sure you have the best outcome. So don’t let bad credit keep you from reaching your dreams – call us today to fix bad credit!