Too many credit inquiries

How many is too many?

In Australia, when you apply for any credit such as; Home loans/ Credit card/ Store card/ Car loans/ personal loans/ Telecommunication service/ Utility paid in arrears. It will automatically be marked on your credit file for the next 7 years. However the last 12 month is the most critical and can determine if you get approved or declined even on a 80% LVR loan.

Our banking system works differently to overseas market, the less credit inquiries you have the better!

Credit inquiries and applying for a home loan ( new loan, pre-approval, refinance and equity release)

As a general rule.

If your applying for a 80% LVR loan of under ( Min 20% deposit or equity) - Keep the number of credit inquiries below 4 in the last 12 month and below 2 in the last 6 month.
If your applying for a loan over 80% LVR ( 80.1-95% LVR) - Keep the number of credit inquiries below 3 in the last 12 month and below 1 in the last 6 month.

If any of the following applies, reduce the above credit number by 1.

You had a loan rejected in the last 6 month
More than 12 credit inquiries in the last 24 month
More than 70 credit inquiries in the last 5 years
Your on probation or been employed in your current position for less than 6 month
You have high consumers liability such as credit card, car loans and personal loans ( Over $30,000 in limit)
You do not have genuine savings
You have applied for credit with a non-conforming lender or have a non-conforming lender on your credit file in the last 24 month **
You have an default payment marked on your credit file

If any of the following applies, you can increase the above credit number by 1-2 subject to approval ( Please contact us for a personalized advice)

High net worth client, over $1,000,000 in net worth
Have more than 3 properties in Australia
Applying with a non-credit scoring bank
LVR is below 70% ( Min 30% deposit)
Have a strong financial relationship with the bank you are applying with ( Normally have at least 4 product and over $500,000 in asset)

Who is consider a non-conforming lender

Non-confirming lenders generally deal with people who has a unique situation that does not fit the traditional banks criteria. Having a non conforming lender on your financial is fine as long as you and your broker/banker knows how to present the file and choose the right bank and LVR to present the deal with.

In most cases we find that consumers that have a great credit file does not know they are applying for a loan with a non-conforming bank as it's well "packaged" Ie Some of the big retailers interest free deals and car dealership are done by Ge Money, which is considered a non conforming lender.

Some non-conforming lenders are worst than others, especially the overseas one and payday lenders. There are over hundreds of non-conforming and private lenders, we will list the top 12;

Payday lenders
Pepper home loan
Liberty financial ( Very common for some car dealership)
Ge Money ( very common for the Harvey Norman and related store card)
Fox Symes
Redzed
La trobe
Paramount
Bluestone
Merchant Mortgages
Resimac
societyone

How to check your credit file and credit score

Email: info@shapehomeloans.com.au

Call: 1300 745626

You can order your own for free here ( Click here to be directed to the free credit check link)

Updated: July 2015

How to improve your credit file - Click here