Credit Scoring and Mortgage Applications

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Most banks use credit scoring to assess loans. This involves not just looking your credit history but the full dynamics of your application.

This week, I would like to assist you by outlining some tips to get the best result on the scorecard with NAB : –

1. The higher the LVR, the stronger the deal needs to be

2. Multiple CRAA enquiries over the last three months will rank poorly

3. A high number of consumer debts, or, where we are being asked to consolidate, will rank poorly

4. Interest only for owner occupied loans will effect the outcome

5. A poor asset position in relation to age will rank poor

6. Defaults over 80% will normally decline

7. Incomplete details such as name of the nearest relative, and bank account, also has an effect on the rating

8. The scorecard now “picks up” the post code where it is deemed to be high risk

Where the client has accounts at NAB, it will look at the existing history, and rank very favourably

Now this is where we need to point out that most of the big banks credit score while others do not. This is why you should speak to a broker to best assist you in finding the best loan for you. This doesn’t always mean the best rate* but is it better to get the house you want or the loan you want?

* Something we do here at Mortgage Advice is look at your scenario and review the best option for you now, while building a plan to get you to the best interest rate/product down the track. Credit score and credit assessing dynamics can usually be improved in a 12 to 24 month period.

I hope you find this useful and helpful for when you are next looking to refinance or purchase a new home for you and your family.

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