help please (regarding debt and loans)

[mum2bubba]

I just want to know when it comes to getting a big loan amount (like for a house) and they check your credit or debt history etc what are they actually checking? We have a few bills that have been paid a bit late and I also have a fine :rolleyes: that needs to be paid do they take these things into account or is it just big things like other loans, previous credit history etc? Thanks.

[Becteria]

They are checking for defaults or bankruptcy etc....your issues sound ok... but if you are worried you can get your credit history for free from www.vedaadvantage.com.au (http://www.vedaadvantage.com.au)

[SorenLorensen]

yeah you sound like you wil be fine, they jus need to know 2 things 1)you do pay our debts 2) you are not flight risk

[SilverStarfish]

When you are applying for a home loan they will check your credit limits on all credit cards, store cards (ie Myers), personal loans etc.

They will count the credit limit against you, not just how much you owe on it. For example, if you have a Visa card with a $5000 limit, they will count that as $5000 of debt (potential debt) regardless of how much you actually owe on it, if anything at all.

[WeloveHarriet]

Okay what happens when a financial institution does a credit check it does the following:-

1. Are you a bankrupt / discharged bankrupt

2. Do you have any defaults - ie utilities / bills / loans / credit cards / lines of credits that have not been paid within the appropriate timeframe. Most companies send you two / three letters requesting payments before they list a default. Once this is done and you still haven't paid the account they can list a default against you. This is a "strike" against your name and can really stuff you up when going for a loan as it can show that you aren't committed to your financial position.

3. The last thing it shows it how many times you have applied for a form of credit - ie credit cards / personal loans / lines of credit / telephone accounts. It is a cumulative effect over the last two years or so. So if you go from Bank to Bank applying for personal loans etc it also can go against you. You should never apply for any for of credit unless you are absolutely sure that you have found the right bank for you.

You can always request a copy of your credit check at any stage. The one for NSW you can request a copy over the internet (which they charge you for) or a paper copy which from memory is either cheaper or free but it takes longer to receive.

The absolute biggest thing to always remember is if you are unable to pay any bills or loans on time - ALWAYS contact the provider first to ask for an extension - never wait for them to contact you as they will always help unless you ignore them. Once you get into the cycle of ignoring their requests they are less likely to be sympathetic.