The situation
A father wanted to buy his first home with a 5% deposit through the government guarantee. Apart from one event, his credit history was clean.
The challenge
A few years earlier, during the pandemic, he had one credit event that was out of character. The automated systems some banks use would decline his application on his credit score alone, without anyone reading the story behind it.
What we did
- Sat down with him to understand what happened, why, what he did to fix it and what is in place so it doesn’t happen again
- Wrote that story up properly for the lender, with the evidence to back it
- Took it to lenders on our panel that have a person assess the file, not only a score
- Worked through the lender’s questions until we had an answer
The result
The lender’s business development manager agreed he shouldn’t be punished for a once-off event from years ago. He was approved at the same pricing as any other first home buyer. The other option was a specialist lender for impaired credit, which would have meant a higher rate and paying lenders mortgage insurance.
“My finance was done on same rate as others even after some low credit scores.”
What this means for you
One bad chapter on your credit file doesn’t automatically rule you out. How it is explained, and which lender looks at it, can matter as much as the score. If this sounds like your situation, book a free 15 minute call.
Names and some details have been changed to protect the client’s privacy. Every situation is different, and your result will depend on your own circumstances and the lender’s assessment. General information only, not credit, financial or legal advice. Sklupple Pty Ltd (ACN 676 755 990) trading as KK Talks Finance is a Credit Representative (CR No. 569266) of Australian Finance Group Ltd (ACL 389087).