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Looking After Your Credit File

Looking After Your Credit File

When applying for a boat loan (or any loan for that matter), one of the major factors that influence both the approval decisions and interest rates offered is your credit file and credit score.

Credit scores are increasingly becoming a bigger influencing factor. With the recent introduction of Comprehensive Credit Reporting (CCR) changes to credit files, credit scoring is now playing a much bigger factor than in years gone by where rates were mainly determined by year model of the asset (lower rates for new assets and slightly higher rates for older assets).

A general rule of thumb is, the higher your credit score, the lower interest rates that lenders will offer. Nevertheless, having a small historical blemish on your credit score doesn’t mean you can’t find a good deal. You need to understand and take care of your credit file to keep it as healthy as possible. Even if you have good credit, you may quickly find that excessive credit enquiries can leave you with some unwanted baggage that can cause you problems when applying for a loan.

Simply applying for your phone or electricity account can leave an enquiry on your credit file. You may also want to arrange a credit card as a backup for a rainy day so you apply for a few online to weigh up your options. Every time you apply for a credit card, car loan, or mortgage online, you can expect an enquiry to be added to your file.

While several enquiries is not inherently a bad thing, it is important to understand that this can change or alter the way a financier may view your application.

Shopping around is considered the way to get the best deal. However, a customer can quickly find themselves hamstrung or disadvantaged by a “busy” credit file. It can be viewed as being “credit hungry” in the lender’s eyes, and they can feel you are at a higher risk of defaulting payments despite having no blemishes on your credit history. The type of enquiry can also impact credit decisions. Many lenders frown on enquiries made to “payday lenders” as this can, in some cases, indicate problems with personal budgeting.

A lender upon seeing a busy credit file will do one of three things. They will decline the application outright, or offset the associated risk with a higher interest rate, or require additional security for the loan.

If you have a busy credit file, the only thing you can really do is wait and not maker further applications. As they say, time heals. The problem with waiting though, is that sometimes it is not an option if you want your boat now!

BEST DEAL WITHOUT IMPACTING MY CREDIT FILE?

A good option to shop around for a good deal on your boat loan is to go to an experienced and reputable broker, like Credit One. A good broker will have access to a panel of different lenders, know what their credit guidelines are, and find a great deal for you, before submitting your application, thereby minimising the number of enquiries that are put on your credit file. It saves you time, money and stops you from getting a busy recent credit file. By submitting an online enquiry, you will be contacted by one of Credit One’s experienced consultants who will guide you through the entire process, and get the best deal for you without damaging your credit file. Our experienced team at Credit One are happy to discuss any questions you may have regarding your personal circumstances and obtaining that boat loan or getting a preapproval in place.

So call us today on 1300 Credit (1300 273 348) or visit us online: www.boatloansfinance.com.au or email us: boats@creditone.com.au * We are also agents for Club Marine Insurance.

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