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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 ?
I never had a credit card, loan in NZ.
if you've never borrowed money in nz
you have no credit history
So what does the lender look when I go for my first loan ?
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
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.
Originally Posted by eri
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!
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....
years ago i bought a tv on 12months interest free credit for this purpose
Originally Posted by Perry
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
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.
What exactly does that mean? The card type that refunds
Originally Posted by Maccachic
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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