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How to Get a Loan with Bad Credit Score

Let’s face it – it’s difficult to get a loan with bad credit score. That’s because a lot of banks and lenders will show you the door if your credit score is below 600. After all, your credit score tells them how likely you are to be able to repay your loan. Therefore, the lower your score, the lower your chances.

But don’t despair. Just because it’s difficult, that doesn’t mean it’s impossible! We’re going to help you find the best options to get a loan with a bad credit score in Australia.

Where to Get a Loan with Bad Credit Score

These institutions are the best places to look for a personal loan. You should always compare the exact rates offered and make sure you get the best possible deal. But remember that with a bad to average credit score, you can expect to pay higher interest rates than someone with a decent credit score.

Australian Military Bank Fixed Rate Personal Loan

Interest Rate (p.a.) – Between 7.93% and 18.87% depending on your risk profile

Loan Amount – Between $1,000 and $80,000, but only up to $40,000 for debt consolidation

Loan Term – From 1 to 5 years

Application Fee – Between $100 and $500

Monthly Service Fee – $10

Visit Website and see if you qualify for a loan.

Citi Personal Loan Plus

Citi Personal Loan Plus

Interest Rate (p.a.) – Between 8.99% and 17.99% depending on your risk profile

Loan Amount – Between $5,000 and $75,000, but this depends on your credit score and income

Loan Term – From 3 to 5 years

Application Fee – $0 (but a $199 establishment fee may apply)

Monthly Service Fee – $10

Visit Website and see if you qualify for a loan.

Latitude Personal Loan (Unsecured)

Interest Rate (p.a.) – Between 13.99% and 29.99% depending on your risk profile

Loan Amount – Starting at $3,000, but Latitude will decide on a maximum depending on your credit score

Loan Term – From 2 to 7 years

Application Fee – $140 for loans $3,000 to $3,999 and $250 for loans $4,000+

Monthly Service Fee – $13

Visit Website and see if you qualify for a loan.

MoneyPlace Unsecured Personal Loan

Interest Rate (p.a.) – Between 7.65% and 26.99% depending on your risk profile

Loan Amount – Between $5,000 and $45,000, but the maximum will depend on your situation

Loan Term – From 2 to 7 years

Application Fee – $150

Monthly Service Fee – $10

Visit Website and see if you qualify for a loan.

NAB Personal Loan Unsecured Variable Rate

Interest Rate (p.a.) – Headline Rate of 12.69%, but how much interest you pay will depend on your risk profile

Loan Amount – Between $5,000 and $55,000, but you should use their borrowing power calculator to see your maximum

Loan Term – From 1 to 7 years

Application Fee – $150

Monthly Service Fee – $10

Visit Website and see if you qualify for a loan.

NOW FINANCE Personal Loans

Interest Rate (p.a.) – Between 8.95% and 16.95% depending on your risk profile

Loan Amount – Between $5,000 and $40,000

Loan Term – From 1.5 to 7 years

Application Fee – $495 (based on a loan of $10,000, so your application fee will depend on your loan amount)

Monthly Service Fee – $13

Visit Website and see if you qualify for a loan.

RateSetter Unsecured Personal Loan

RateSetter Unsecured Personal Loan

Interest Rate (p.a.) – Fixed-rate starting from 7.38% depending on your risk profile

Loan Amount – Between $2,001 and $45,000, but your maximum will depend on your risk profile

Loan Term – From 0.5 to 5 years

Application Fee – $299

Monthly Service Fee – $0

Visit the Website and see if you qualify for a loan.

Don’t Get a Payday Loan

It’s very easy to find someone, either online or on the street, offering payday loans even if you have a bad credit score. This may seem like a good idea, but they typically charge an annual percentage rate (APR) of around 350%. These high-interest rates trap borrowers in a neverending cycle of predatory debt, especially if you’re in the low-income bracket.

If you’ve been considering taking out a payday loan, don’t. Rather stick with the options we’ve given you above and work at building your credit score.

Get a Loan with Bad Credit Score Conclusion

As you’ve now seen, it’s not impossible to get a loan with a bad credit score. But in the long-run, you’re going to find it easier to get a loan (and better rates) if your credit score is higher than 600.

To get a better credit score, you should start by paying off all of your debt (high-interest debt first). You should also try to only use less than 30% of your available credit, and pay all your bills on time.

But while you work on that, there are at least 7 viable options for you to get a loan with bad credit score.

What is a decent credit score in Australia?

Everything you need to know what is a decent credit score in Australia.

Who sets the bar on exactly what is a decent credit score in Australia? An estimate of Over 90% in all the lending decisions around the world is dependent on the FICO Scoring Model. This is similar to happenings in Australia, USA, India, and Germany.

So a credit score refers to a three digit number reflecting on your chances as a debtor to pay back credit while lenders, on the other hand, are credit card companies and banks. They are institutions that take a look at your credit file then calculate your credit score, therefore, they use this credit score to calculate the level of risk they take in lending you credit.

Equally important is that most of these credit scores have varied score ranges and it is estimated that the average credit score familiar to most of the consumers is of the range of between 300 to around 850.

Types of credit scores.

So far, there are four existant credit score agencies: TransUnion, Experian, Fico, and Equifax. Importantly, the government introduced Equifax as the most popular agency in Australia.

In addition, each of these credit score agencies has got a different range. The top score for TransUnion, Experian as well as Equifax is at a range of 800 or 850. However, this range is not constant as it keeps on changing similar to Fico credit agency whose there top score is at 900 points. All these scores begin at 250 or 300 meaning there are no zeros in scores.

Below is a summary to exactly what is a decent credit score in Australia. 

Credit institutions in Australia release loans based on a required specific credit score. The average decent credit score in VedaScore currently termed at Equifax Score ranges at between 250 to 1200, therefore, a safe credit score is that of between 600 to 725 while a good score ranges in between 720 to 832 and most importantly a perfect score falls in between the 800 & 1200 mark.

Importantly it is free to check out your credit score through the National Credit Reporting Body (CRB) lists where the government passes the list on its website at Equifax Australia.

Generally, a decent credit score in Australia is of a credit score of 400 and below indicating that you are in the credit hell while 900 points are utterly perfect.


Ways to secure credit. 

Firstly, before being given a loan many factors are considered for you to secure your loan. The least important of all factors considered is your credit score as people don’t secure their loans even if they are loaded with millions in their bank accounts.

You don’t get loans as you want. You cannot quote “only” a $9 million loan to grow your business. A good example is a wine seller needs more money for him to expand his business yet the wine seller cannot be able to convince any bank or credit card institution to lend him even a dollar.

the secret is in all that you say in the interview as well as other factors in consideration.

Also Read: How to choose the cheapest travel insurance in Australia 2019

Factors affecting what a decent credit score in Australia is:

There are some main factors that affect what a decent credit score in Australia is:x

      Firstly the user’s history of Credit     Repayment. This is considered to be the most important factor affecting what a decent credit score in Australia is. It makes up to roughly a third of your score is your history in credit repayments. It is how often you make your credit repayments and on time. The best thing you can do to your credit score is to make timely payments to all your loan obligations and credits.

Second is pay your rate of utilizing credit – 

It is considered to be how much of the given credit you are utilizing. Before applying for a credit  ensure that you have paid off  all your balances in full and your utilization is around minimal

Third is your credit Mix: This term is used to describe the mix of secured and unsecured accounts in your credit file. Basically, it is advisable not to open too many credit cards since too many unsecured exposures can really hurt and affect your score. Ensure that you secure your unsecured exposures.

The two other limitation of decent credit score in Australia are:

The age of the credit: Credit age is defined as the age of the age of your account from when it is opened. The more the experience you have in managing your credits, the higher your credit score gets. It is advisable to retain your old credit accounts and keep them open.

Specific enquiries for securing a credit : Credit enquiry can be plainly described to as your hunger for new credit. Do not seek for new loans and credit unless you really want it since every time you enquire for a loan, banks take a look you up approach on the credit bureaus and leave your footprints. Don’t shop for loans. Unless you really are in need of it or dying. You might get away with it.


Ways to improve your credit scores in Australia. 

Your competence in paying credit builds your credit score. You can improve your credit score through the following ways:

  • First, pay all old debts present on your credit report.
  • Furthermore, correct all errors on your credit card report.
  • Try to increase limits to your credit
  • Pay all your bills on time.
  • Try to secure automatic payments.
  • Additionally, try to use more of your credit
  • Open a more secured credit card account.
  • Try to retain a low balance on your credit card.
  • Finally, monitor and again ask for a copy of your credit score.

Read Also: Do I qualify for a mortgage loan in Australia

PAY ALL EXISTING OLD DEBTS ON YOUR CREDIT REPORT. 

You can’t up your score if you have no credit but a good thing to your credit card report is clearing an old debt.

ENSURE YOU CORRECT ALL ERRORS ON YOUR CREDIT CARD REPORT. 

Check on your reports regularly. This is to ensure that all of your information is correct What it but to credit bureaus in case you notice any errors on your credit card report. Errors might include someone else’s debt information present in our file, debts you didn’t secure, fully paid debts but the incorrect history of payments.

EXTEND THE LIMITS TO YOUR CREDIT.

In the event that you want a credit, increasing the limits to your credit can have a number of significant benefits. Unless you are able to manage your credit wisely, this mainly lowers your overall credit utilization as well as it increases your score provided you maintain low credit utilization and pay debts on time.

PAY YOUR BILLS ON TIME. 

Punctuality is key in life and this applies to credit payment. If you make late payments on your credit cards, your score will take a big hit.

TRY SETTING  UP AUTOMATIC PAYMENT METHODS. 

In the event that your credit exceeds deadlines to payment then consider approaching automatic payment procedures for those debts. This way it is not easy to forget to pay your bills on time.

TRY TO USE MORE OF YOUR CREDIT. 

It seems uniquely counterintuitive, but a sure way to fix your credit score is by using your credit often. Your capacity to pay and use credit creates opportunities for you to secure credit and shows your abilities to manage your finances well.

Also Read: Can you get credit for Non-citizen of Australia

OPEN A MORE SECURED CREDIT CARD ACCOUNT. 

A secured card is perfect for someone who has no credit history or has a poor credit score. Most of the lending firms compare how much is in your credit card. This is in terms of loans and how much your loan you need.

For all these reasons, one is able to secure credit in case he/she applies for one.

The conclusion to what is a decent credit score in Australia.

Lastly, your three-digit credit score is the most important number in your report. Mainly because you will be able to get a bigger picture of the health of your credit. Therefore, having a good knowledge of your credit gives you a leg up when improving your credit scores as you can see eases the stress of applying for loans even with a low credit score.


References.

https://www.mymoneykarma.com/credit-score/cibil/cibil-score/cibil-score.html?utmsrc=CREDITSCOREBASICS

https://www.annualcreditreport.com/foreignLocation.action

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