A bad credit rating can have a big impact on your finances and your lifestyle. From those smaller day to day purchases that you have to forgo because of a maxed out credit card to those more significant buy’s, like getting into your first home, there can seem like no way out of a bad credit score.

In saying that, having a bad credit score now doesn’t mean you are stuck with it for life. There are many ways to resolve, improve and avoid bad credit ratings.

Here we outline the top FAQ’s when it comes to bad credit home loans so that you can get onto the path of home ownership in Perth as soon as possible.

FAQ 1: Can shopping around for personal loans affect my credit file?

In some cases it can. Each time you apply for a loan or for credit, whether it be for a home loan, a personal loan or to pay your bills, the provider you have applied with obtains a copy of the application, which automatically gets added to your personal credit report. If you have lodged a number of applications that have not been approved, financial lenders may see this as an indication of financial instability, so it is wise to not “over apply”. If you have been approved, obviously lenders have determined that you are creditworthy.

FAQ 2: Can paying my bills late impact my credit rating?

A few late repayments here and there won’t be an issue here, we all miss those ‘Due By’ dates. However, if you have a number of unpaid bills that are above the $150 mark and that have been overdue for multiple months, this can get listed on your credit report.

There is light at the end of the tunnel here however as once you have paid off the overdue bills, they get marked as
“paid” on your credit report. While a record of your past unpaid bills may stay on your file, the fact that you have paid them off is a good sign when it comes to borrowing money for a home loan.

FAQ 3: What about minimum credit card repayments, how do these affect my credit score?

Historical information such as repayments made to your credit card and personal loans can be recorded on your credit file. While a few late repayments to your credit card won’t significantly affect your credit score, depending on the amount and how late the payment was made of course, a number of no or late repayments to your credit card balance can affect your credit score.

FAQ 4: So what can I do if I can’t repay my bills?

The key here is to act quickly. If you are struggling to pay your bills on time or to make the required repayments on your existing loans, first contact your credit providers and find out what their procedures are. While they might not be readily advertised, your bank and other lenders will have payment plans and other methods in place that can help to keep your credit score in check so that it doesn’t affect your ability to secure a home loan in the future.

If you need help in getting a bad credit home loan speak to No Savings. Our network of brokers have experience in helping home buyers who have had trouble obtaining finance before. Contact us today and see if you qualify.