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  1. #1

    Default What makes a good credit history

    A mortgage broker said, he took my application to the bank whom I bank with, for a 5% deposit mortgage preapproval, and was told my account conduct was not good.

    I never had a credit card, loan in NZ.
    I never missed on any payments or made late payments for rent or any bills. So thought my credit rating will be excellent.

    I keep small amount in cheque account and rest I keep in the linked savings account. Sometimes my cheque account will be overdrawn by small amounts often less than 50$, and very rarely upto $100. In almost all the instance I had credited back the cheque account on the same day so the bank don't fine me, or rarely the next day.

    Before going through the mortgage broker I talked to the bank, and they said they can give a preapproval if I can make 10% deposit.

    1. What makes a good credit history ?
    2. Does the banks have different criteria when going directly or through brokers ?

  2. #2
    Join Date
    Sep 2008
    Posts
    4,477

    Default

    I never had a credit card, loan in NZ.

    if you've never borrowed money in nz

    you have no credit history
    people keep trying to rewrite the world as themselves

    like that'll work...

  3. #3

    Default

    So what does the lender look when I go for my first loan ?

  4. #4
    Join Date
    Nov 2006
    Location
    Cyberspace
    Posts
    4,465

    Default

    Quote Originally Posted by eri View Post
    I never had a credit card, loan in NZ.

    if you've never borrowed money in nz

    you have no credit history
    Not necessarily. How many times have you moved in the last few years. Credit checks which I have seen don't show money borrowings. They show credit checking. For someone who has had zero loans/HP's etc. there are no credit checking entries. This, on itself, is not too bad. Moving home often is a worse factor.

  5. #5
    Join Date
    Sep 2008
    Posts
    4,477

    Default

    afaik

    they look for your ability to pay

    and your track record of paying

    they want to make money off you

    they want to see that others have successfully made money off you

    it gives them confidence
    people keep trying to rewrite the world as themselves

    like that'll work...

  6. #6
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    10,171

    Default

    From past experience - second hand - and talking
    to others like Orion, having no credit history seems
    almost the same as having a bad credit rating.

    Bizarre as it seems, that was the impression I got
    from someone who told me a tale not too dis-similar
    to Shami's experience. As a consequence, I advised
    some family members who were similar - always paid
    at the time of purchase - to actually get something
    on one of those no-interest HP arrangements, for no
    other reason than creating a good credit history.

    Almost seems as if the 'system' discriminates against
    people who pay as they go!

  7. #7
    Join Date
    Sep 2008
    Posts
    4,477

    Default

    Quote Originally Posted by Perry View Post
    I advised
    some family members who were similar - always paid
    at the time of purchase - to actually get something
    on one of those no-interest HP arrangements, for no
    other reason than creating a good credit history.

    Almost seems as if the 'system' discriminates against
    people who pay as they go!
    years ago i bought a tv on 12months interest free credit for this purpose

    even though i could have paid cash

    probably as it was so long ago it had dropped off the radar

    but the point is they want to create a revenue stream out of you

    they want your money

    if you are the kind of person who uses a credit card and always pays it off within the interest free period

    it shows 2 things about you

    1. you are quite good with your money

    2. the bank doesn't make any money off you, you make money off them

    they would far prefer you paid just the monthly minimum so they could make some money off you

    lending money is not a social enterprise run by welfare groups

    even micro-credit banks in bangladesh want/need to make money off the people they lend too

    so the lender looks for 2 things from the borrower

    1. the ability to make more money off them than the cost of the exercise

    2. to lower the risk as much as possible that you won't/can't pay the loan back
    people keep trying to rewrite the world as themselves

    like that'll work...

  8. #8

    Default

    every bank is different . the banks have lost a lot of money and they are now cautious . I suppose the answer is : the more deposit you have the better. The banks are looking into your ability to save - so if your saving acc is linked to your current account, and every week there is money going into it - great start- do so for the next six months and approach them again....

  9. #9
    Join Date
    Jul 2011
    Location
    Tauranga
    Posts
    2,062

    Default

    My visa pays me at the end of the year, im guessing my bank doesn't like that Altho they were pretty quick to drop my float rate when I asked.

  10. #10
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    10,171

    Default

    Quote Originally Posted by Maccachic View Post
    My visa pays me at the end of the year,
    What exactly does that mean? The card type that refunds
    the fees if a certain amount is spent? Something else?

    I find that the top credit cards (with expensive regular
    fees) are really only viable if one uses it for overseas
    travel at least once every two years, taking advantage
    of the in-built (albeit limited) travel insurance.

    I.e. the airpoints or other 'rewards' are roughly equivalent
    to the difference between the 'common' card fees and
    those of the 'gold-plated' cards of the same brand.


 

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