Rapid Finance on 29 September 2022

So, you want to boost your credit score and land that loan – exciting! But it can be more than a little daunting coming to grips with the many external factors influencing your financial future. Also daunting: the intricate logistics that accompany launching your application, including a whole lot of lingo and jargon that’s likely to sound pretty alien if you’re not from the finance world.

Do you know what an enquiry is, for example? It sounds innocuous, but a poorly timed enquiry could seriously harm your chances of securing a loan. 

The good news is knowledge is power, and the Rapid Finance team is here to arm you with all the info you need to become completely and confidently loan-application-ready.

What is an enquiry?

When you apply for any credit or loan, you consent to give the prospective lender access to your credit history and relevant information. This is called an enquiry, and the lender performs this check so they can make an informed assessment of your suitability for a loan, based on your financial habits and current circumstances.

Soft vs. hard enquiries

Every time you yourself check your file, a soft enquiry is recorded. It’ll stick around on your file, but soft enquiries – even a whole heap of them – won’t affect your credit score or chances of landing that loan. A soft enquiry can only be seen by you, when you request a copy of your credit file from the credit reporting body. Anybody else that accesses your credit file, generally can not see soft credit enquiries.

An enquiry recorded by a third party (such as a lender) is called a hard enquiry. Every time a lender makes an enquiry, it is recorded on your file to indicate you have made an application for credit with them.

Why enquiries matter

We see one rookie mistake all the time at Rapid Finance: an over-excited loan applicant will ‘shop around’ for a decent loan and decent interest rate – and in the process rack up a whole stack of enquiries on their file. We see a lot of customers, shopping around to try to get a good deal or to see if they can get finance (if they have defaults), only to make their circumstances worse!

So, what’s the big deal? Well, when a lender reviews your file and sees multiple enquiries in a short period of time, it tells them that you either a) don’t really know what you’re doing or b) are desperate for finance (and maybe being turned away by other lenders) – both of which make you a less-than-ideal loan candidate.

How much do enquiries influence your credit score?

When we think about credit scores, we typically conflate it with credit history: your track record of making repayments and meeting financial obligations on time. Of course, your credit history does play a major role in calculating your credit score – but there are other important factors, like enquiries, to consider. 

The number of enquiries on file also speaks to your strength as a loan candidate, and certain types of enquiries can even lower your score.

Your personal details – your employment and housing history, for example – can make you a more or less attractive loan candidate. Potential lenders will also consider any criminal history or court judgments before approving your loan.

Why our customers choose Rapid Finance

When creditors evaluate loan applications, they’re looking for minimum risk and evidence that the applicant understands their obligations and the processes at play. Working with a broker is the best way to avoid misstepping and sabotaging your chance at loan success.

At Rapid Finance, we’ve been helping applicants just like you navigate the ins and outs of car, home and personal loans for decades. We’re passionate about making the process as transparent, supportive and seamless as possible, so you can feel empowered about your financial future.

Time to take charge

Ready to spread your financial wings and get Rapid results? It starts with getting the full picture. Give us a call on 1300 467 274 or apply online today.

On a side note, don’t forget about our wholesale cars. We offer a one stop shop where we can help you source a vehicle through our extensive wholesale network. Through our network, we will do some extra checks on your behalf as well as inspecting the vehicle to ensure it’s in good condition.

We will also check :

There is no money owing on the vehicle

The vehicle has not been a repairable write off

The vehicle has not been in any serious accidents 

We will check everything works on the vehicle 

We will get the roadworthy for the vehicle

We will do a detailed inspection of the vehicle

To find out more info about our wholesale network vehicles, click here.