How to get a loan based on your credit rating
You don't have to settle for the big four banks
The days of simply going to one of the big four banks for a loan are over.
Today, in Australia, there are more options than ever for securing:
So, if you feel your bank isn't giving you the deal you deserve based on your credit rating, you have numerous opportunities to go elsewhere.
Here's how you can use your credit rating to leverage your options and get a better loan.
5. Check your credit rating at least once a year
The first step is to find out where you stand credit-wise.
To do this, simply check your credit rating online using a website such as veda.com.au.
Provided you only check your rating once a year, it's free.
Here's how credit ratings break down in Australia.
| credit range | rating |
|---|---|
|
833 - 1200 |
excellent |
|
726 - 832 |
very good |
|
622 - 725 |
good |
|
510 - 621 |
average |
|
0 - 509 |
below average |
If your credit rating is excellent, very good, or even just good, then you may be able to get a better deal.
4. Fix any mistakes on your credit rating report
The Australian information commissioner found in a recent survey that 30% of Australians who requested their credit rating found mistakes in their report.
Mistakes can result from a range of issues, many of which are out of your control.
For example:
- defaults can appear incorrectly due to creditor processing errors
- a creditor might have failed to contact you regarding an outstanding debt
- an account may have been created in error due to fraud or tampering by a third party
Additionally, credit reporting agencies can make mistakes too. They may list your debts twice. Or they may get the debt amounts wrong.
All these things can affect your credit rating and the type of loan for which you are eligible. They can also typically be amended relatively easily.
So, before applying for your next loan, ensure your credit report is correct and up-to-date.
3. Use a good credit finance broker
now that you've found out how good your credit rating is, and you've made your rating as accurate as possible (by correcting mistakes), it's time to seek out a loan.
finance brokers are 'experts in loans'.
They work as a go-between between borrowers and lenders, to get a better deal for the borrower and additional leads for the lender.
Finance brokers:
- have access to numerous lenders and loan products
- can shop around and compare options on your behalf
- negotiate with lenders based on your good credit rating
the benefit of using a broker is that while you don't think about loans every day, finance brokers do.
Their connections and database of lenders can help you find options of which you were previously unaware. Some of which may offer lower interest rates or more flexible features.
Additionally, their expertise and experience in negotiating with lenders can make the difference between a good and a great deal.
2. Demonstrate your good credit on loan applications
if you have a good credit rating, then you're likely in a good position to negotiate the terms of your loan.
So, don't be afraid to promote your strengths.
Argue that you deserve a better loan based on your:
- proven ability to meet financial obligations
- your exceptional track record
- capacity to get a better deal elsewhere
There's no need to be impolite or rude. However, you should be firm and persistent.
If your service representative cannot help, ask to speak to their manager.
And, if they can't help either, be prepared to walk away in order to find someone who will.
1. Find a finance broker that rewards your good credit rating
It's true that all brokers consider your credit rating when assessing your loan application.
However, not all reward you for having a very good or excellent credit rating.
Some brokers check whether your credit rating is within an acceptable range. And if it is, they then offer you the same rate as other eligible applicants.
Therefore, even though your credit rating is excellent, you may be offered the same rate as someone with only a good credit rating.
If this seems unfair, that's because it is.
If you've worked hard to establish an excellent credit rating, you should be rewarded for it.
The good news is that there are finance brokers which offer better loans or lower interest rates based on good credit ratings. you just have to seek them out.
"if you've worked hard to establish an excellent credit rating, you should be rewarded for it."
we Could help you to get a better loan
Not satisfied with the loans offered by your current lender? Think you deserve a better loan because of your good credit rating? We may be able to help you to secure a better finance option.
At Rapid Finance, we are car loans, home loans, and personal loans specialists in Australia. We can work with you to seek out a finance option that matches your needs, situation, and credit rating.
You can find out more about Rapid Finance online or by calling 1300 467 274