Monday 24th June 2019
When it comes to the relationship between your credit card
history and loan applications, it seems many people are in the dark about
what’s truth and what’s not.
Gather a group of normal Australians in a room and ask them
about the role their credit card plays in getting a loan – you will likely get
These statements aren’t true, however – your credit card
could affect your chances of getting a loan in more ways than you realise. Read
on to see what separates fact from fiction!
How lenders assess
your loan application
Lenders normally focus on one metric to decide whether
you’re a suitable loan candidate or not – card limit. This shows your repayment
capacity, and lenders normally judge the minimum figure to be 3 per cent of
your card’s limit, regardless of how much you owe when you apply.
What about my credit
While your card limit is important, your credit history is
another important point to consider when applying for a loan. While a history
of debt won’t completely rule you out from securing a loan, it will limit your
chances of securing a deal with favourable terms and interest rates. Similarly,
if you have a good credit history, you’ll have a better chance of finding a
more competitive loan.
How can I improve my
chances of securing a loan?
There are a couple of things you can do to improve your
chances of securing a loan:
For more information about how to improve your chances of
getting a loan, contact our team today.