Avoid a Busy Credit File When Seeking a Home Loan

As a mortgage broker, we apply hundreds of loans during a year and we have been warning our clients of the pitfalls of falling foul of a lender’s credit scoring system when applying for a home loan.

Our mortgage broker Amit Sharma who works in association with Loan Market Melbourne says one of the main reasons consumers have a mortgage application declined is due to the number of enquiries on their credit file.

“If you have a high number of enquiries on your credit file it can result in you failing the credit scoring system and having a loan application rejected, even if you are in a good financial position,” says Mr Amit Sharma.

“It’s very common that when you come to a bank to check on how much you can borrow, the branch staff lodge your application through the system to determine your borrowing capacity.

“This will be recorded as an inquiry. If you end up with a number of enquiries on your file it can result in automatic decline by several lenders because you are considered to be a credit risk.”

Mr Amit Sharma says other factors considered by lenders include employment history, residency status, age, the level of personal debt as well as the applicant’s asset and liabilities position.

“There are lenders who only do manual assessment of your application without credit scoring as long as you can provide evidence of your financial situation”.

Mr Sharma says most home loan application problems are avoided by organising finance upfront and having pre-approval in place by using the services of an expert mortgage broker. “A specialist finance broker will understand customers’ needs, submit the application to source the best solution and home loan product and obtain loan approval the first time,” he says.

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Amit Sharma provides mortgage broking services in all Melbourne suburbs including but not limited to: St Albans, Deer Park, Caroline Springs, Hillside, Taylors Lakes, Taylors Hill, Sydenham, Burnside, Cairnlea and Sunshine.

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