Shopping Around for Your Next Loan Why It’s Best to Leave Credit Crunching to the Professionals

From the first moment that you apply for any type of credit, regardless of if it’s a personal loan, credit card or to use a buy now, pay later service like Afterpay, your credit report begins. This report is an extensive outline of your borrowing and payback habits and is what reporting agencies, such as Equifax, Experian and Illion, use to determine your credit score. In Australia, your credit score is a reflection of how reliable you are as a borrower determined by the agency’s ranking system of a number between 0 and either 1,000 or 1,200. Within this number ranking system, you are provided with a category from Below Average to Excellent which, again, varies depending on the agency. In a nutshell, however, the higher your credit score, the better your credit habits and the more likely you will be lent and the better the interest rate and loan terms will be. 

Many things can affect your credit score with the information on your credit report being kept, on average, five years or seven years for more serious credit notes such as clear-out listings. Some of the areas that can affect your score are fairly obvious, such as having a poor repayment history or negative information like defaults and bankruptcies or missed payments listed on your credit report. However, there is a lot of other information listed on your credit report that is taken into consideration when your credit score is being determined. For example, your personal information including the amount of time that you’ve been in your current job, whether or not you are a director of a company, your age and the length of time you have lived at your residential address is listed on your report and affect your score. In 2018, Comprehensive Credit Reporting was introduced to include more positive financial behaviour on an individual’s credit report in an attempt to paint a more balanced and accurate picture of you as a borrower.  However, with all of this in mind, it is very important to be aware of how your spending, repaying and applying habits can affect your credit score. Both applications, as well as loan enquiries, are also listed on your credit report, which means that there is no way to shop around for the lowest interest rate or best loan for your circumstances without it being noted. Unfortunately, this can look particularly bad with credit card loans and gives lenders the impression that you are scrambling for cash or lack the commitment to continue payments on a loan – and not necessarily that you are being a savvy lendee who is looking for the best deal.

Before you begin Googling “best interest rate loans”, stop and contact the team at Rostron Finance by calling 1300 70 70 39. As a team of finance brokers, the Rostron team can shop around on your behalf to find you the best deal to suit your unique situation. This makes the process faster, easier and reduces the number of enquiries on your credit report to help keep your credit score as high as it can be, all while ensuring that you get the best deal possible.