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 responses:
- ”It’s fine that I have multiple credit cards – it means I’m a low-risk borrower”.
- ”I just need to pay off my monthly card balance and I can secure any loan I want”.
- ”I don’t even use my credit card – the chances of me getting approval is high”.
- Before you apply, you should ask your card provider to adjust your credit limit to the lowest amount possible. This will take some time, and you need to keep a record to show lenders your suitability.
- A bad credit history means you’ll have to try harder to make higher payments more frequently in order to be considered a candidate.
- If your credit history is positive, you should speak to a loan specialist to help you secure a loan that is right for you.