Avoid a Busy Credit File When Seeking a Home Loan

Leading mortgage broker Loan Market has warned of the pitfalls of falling foul of a lender’s credit scoring system when applying for a home loan.

Loan Market Melbourne westside senior financed broker Hannah Nguyen said one of the main reasons consumers have a mortgage application declined is due to the number of enquiries on their credit file.

“If you have a high number of enquiries on your credit file it can result in you failing the credit scoring system and having a loan application rejected, even if you are in a good financial position,” Ms Nguyen said.

“It’s very common that when you come to a bank to check on how much you can borrow, the branch staff lodge your application through the system to determine your borrowing capacity.

“This will be recorded as an enquiry. If you end up with a number of enquiries on your file it can result in automatic decline by several lenders because you are considered to be a credit risk.”

Ms Nguyen said other factors considered by lenders include employment history, residency status, age, the level of personal debt as well as the applicant’s asset and liabilities position.

“There are lenders who only do manual assessment of your application without credit scoring as long as you can provide evidence of your financial situation,” she said.

Ms Nguyen said most home loan application problems are avoided by organising finance upfront and having pre-approval in place by using the services of an expert mortgage broker.

“A specialist finance broker will understand customers’ needs, submit the application to source the best solution and home loan product and obtain loan approval the first time,” she said.

Hannah Nguyen provides mortgage broking services in suburbs including but not limited to: St Albans, Deer Park, Caroline Springs,  Hillside, Taylors Lakes,  Taylors Hill, Sydenham, Burnside, Cairnlea and Sunshine.