Mortgage brokers and lenders use your credit rating to determine if you’re a good loan candidate. A bad credit score – caused by missed payments or excessive debt – can hurt your chances of getting your first home loan, but no credit rating can be detrimental as well.

At Smartline, our brokers want to help you find the most suitable home loan and mortgage rate. Your credit score is a major factor in the loans you’ll qualify for, but don’t panic if you haven’t built any credit yet. You can grow your rating by always paying your bills on time and making affordable, timely purchases with the right card.

Apply wisely

Need a credit card but can’t get one because well, you’ve got no credit? Not only is this a tongue twister, but it’s also a frustrating predicament to find yourself in.

Not every credit card company will approve your application, so make sure you do your research and apply to banks that are known to offer credit to first timers. Every application you make is factored into your credit score, and too many failed applications can make you look high risk.

Making regular card payments will help you build good credit over time. Making regular card payments will help you build good credit over time.

Consider a secured credit card

Consider getting a secured credit card. Secured cards require a deposit to be used as collateral if you find yourself unable to make payments.

Just like with any card, use only a small amount of your credit allowance each month and always pay it off. Consider using the card for your groceries and fuel costs each month – expenses you know you can afford. This isn’t a pre-paid debit card – the deposit won’t be used automatically if you come up short, so it’s your responsibility to always pay the bill.

Once you’ve used this secured account for an extended period of time, you’ll be able to close it, apply to get your deposit back, and apply for an unsecured card with a higher limit. If you can, it’s a good idea to get a card that reports to all major Australian credit bureaus.

Stay on top of it – check your score regularly

Your credit score won’t change overnight, but you can work on it over time.

Your credit score won’t change overnight, but you can work on it over time. Don’t make the mistake of only checking your score when it’s time to apply for a home loan. Building or improving credit takes time.

There may also be errors affecting your score. If you did, in fact, pay that hospital bill five years ago, dispute it with the reporting agency and submit documentation supporting your claim.

Work with the right advisers

If you want to discuss some of the different loan options out there, consider working with a lending professional. You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete our call request form and we’ll call you!

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.