When you apply for finance every hit against your credit file can affect you obtaining the finance that you require to make your purchase.
Good credit is a valuable asset that allows you to have the ability to borrow funds for products and services such as cars, equipment, homes and medical procedures.
What does a Finance Broker look for?
When dealing with a finance broker there are a few things that they will look for before approving your finance. Lenders will look into your income and what regular expenses you are committed to pay.
Your regular expenses cover things like rent, food, utilities, transport, childcare costs, child support, health care and other debts or loans that you may already have on an ongoing basis.
The amount that you spend on expenses tells the broker what money you have left as disposal income and what you can afford to pay back to any extra debt that you take on.
Do my assets count?
Finance brokers will look at the assets that you have that can serve as collateral before approving your finance. The assets that will be looked into are bank accounts, homes, shares and insurances.
Your Credit Score!
Will tell finance brokers how you manage money, if you are a credible borrower, the amount of debt you already have and if you make payments on time. It will also show your broker how often you apply for finance and the knock backs or hits that you have on your file.
The more credit applications you make the worse it is for your credit file, so using a broker can be an excellent way to protect your credit score by limiting the amount of hits your credit file takes to achieve the finance you require for your purchase.
How you can protect your credit score!
Your credit score is extremely fragile and being aware of your credit and your score is highly important. You can protect and maintain your score by following the following steps:
- Always repay debts on time
- Never ignore bills
- Be aware of all lines or credit and the credit terms including finance companies.
- Limit your credit cards
- Limit your number of credit applications
- Build a history with your lenders as a strong credit history is build overtime.
A finance broker can provide you with the best advice when it comes to your finance options and your credit file, so if in doubt contact a broker to gain further information.