Bad Credit Home Loans
Do you have a bad credit file? We can still help!
There is a lot of ways a person can end up with a bad credit file.
Some examples include non payment of mobile phone contracts, electricity bills or any other loan a person takes and does not meet their obligations. Normally, you would have to miss quite a few payments in order to end up with a 'bad credit file'.
A record of your credit history is maintained by credit reporting agencies such as Equifax, Experian and Illion.
If you do happen to have adverse conduct reported on your credit file, this will make it more difficult to qualify for a home loan through mainstream lenders such as Commbank or ANZ.
Some types of adverse history noted on your credit file are:
- Defaults/Overdue Accounts: This could be due to non payment of credit cards, loan accounts or utility bills. A default is recorded when you have broken the terms of your agreement with the creditor or service provider. The debt has to be more than $150 and over 60 days late.
- Judgements: These are usually recorded against you where a party has filed a 'statement of claim' against you for money owed. We commonly see these type of entries from Local councils and Strata corporations for unpaid council rates or levies.
- Repayment history: A recent change from the government has mandated lenders to report on repayment history for credit facilities you have taken up such as credit cards, home loans and personal loans. Some lenders are still updating their systems to report all credit facilities however most credit cards are now visible on your credit file which discloses the limit, facility setup date and up to 24 months of repayment history.
- Part IX debt agreements or bankruptcy: If you entered into a Part IX debt agreement to round up all your debts or have been through a bankruptcy, this may still be recorded on your credit file (depending on when this occurred).
Other information which can affect your loan approval:
- An overactive credit file: If you frequently apply for credit cards or other credit facilities such as Afterpay or Zipmoney, this does affect your credit score. Once your credit score falls below a certain number due to an overactive credit file, a lot of lenders will automatically decline your application without even going through it. This is due to minimum credit scoring requirements.
- Companies in liquidation: If you are a director of a company which has been subject to involuntary liquidation, this can affect your ability to obtain an approval from a mainstream lender.
- Cross referenced identities: If you have ever changed your name or changed your residence from different states, this could be recorded on your credit file. This will not affect your loan approval unless your previous identity has adverse conduct recorded against it.
How we get your loan approved in case of bad credit?
A lot of mainstream banks and lenders will likely automatically decline your application due to a bad credit file. The good news is we have non bank and specialist lenders that are more flexible with their lending policies and willing to give people a second chance. Ofcourse, they are not as cheap as mainstream lenders however the rates you are offered will depend on the severity of the conduct reported on your credit file. In a lot of cases, small defaults under a $1000 which happened more than a year ago can be ignored.
We will assess your situation and discuss your scenario with these specialist lenders. We will then give you an indicative rate and run through all the fees and charges that may be applicable in your circumstances if you are approved.
You are not obliged to go ahead with our proposal from any of these specialist lenders. It is completely your choice and we are only here to give you options which best suit your circumstances.
In most cases, we assist our clients in obtaining a finance solution in these sticky situations and then later help them to move across to mainstream lenders (once their credit history is good enough to do so).
Common situations we see a lot of:
- Divorce or separation cases. These can end up in bad credit due to non payment of home loans, credit cards or partners simply trying to get back at one another by being difficult with each other. We have helped many people pay out their ex partner and change the property on to their own name.
- Consolidation of multiple smaller debts that have gone out of control. These may be personal loans, credit cards or even an ATO debt!
- Discharged bankruptcies. If you have previously been through a bankruptcy and are now discharged, we can certainly try and put together a solution for you to get back into home ownership.
To find out how we can help, please get in touch with our office!