Bruce's Blog
'Window Shopping' for loans and mortages can adversely effect your credit rating.
Tue, Oct 27th 2009, 15:56Banks have really tightened the rules and the basis on which they will lend you money.
Among other factors, many banks are adopting a “credit score” assessment which includes your credit, employment, residential histories and assets and liabilities.
Your personal credit history is a major basis for acceptability/ eligibility for any loan or credit facility. Having a number of recent credit enquiries on that file can have a negative influence on a lender’s credit score. They wonder if others have declined your applications.
Your credit file is held by VEDA (formerly CRAA then BAYCORP) and can only be accessed by authorized financial participants and yourself. It holds a range of personal details including your current employment, the last five years of your credit enquiries, loans, credit/store cards, company directorships and defaults, if any. It does not show whether enquiries were acted on, declined or just a check that you didn’t realize was made when you thought you were just “window shopping”.
Most people only start to look at their financial position and plans once confidence has returned and/or rates have risen. At this point, shopping around for a home/investment property loan, a refinance or consolidation of debts, taking up personal loans, car loans or adding credit cards may be undertaken. However, each enquiry is registered on your credit file.
Your finance broker can review your current finances with you and consider your best loan options and structure and to shop for the most suitable property, personal or car loans/leases without multiple enquiries going onto your credit file.
Contact me now to review your current finances as well as your future plans.