Borrowers need to consider credit rating

Aussies should be aware of the effect applying for credit cards and other products has on their financial report.

Those looking to apply for a home loan are being urged to first consider their credit history.

Paul Ryan, head of Opportune Home Loans, points out that many of those on the search for such a loan - and in particular younger borrowers - "have no idea about their credit rating".

Speaking to the Sydney Morning Herald, he states that consumers tend to be unaware that every application for credit cards, store finance deals and other lending products is marked on their financial records.

This, he states, is because up until recently credit was easy to come across.

Not only should they make sure their credit report does not have any mistakes on it, but Mr Ryan advises those looking to apply for a home loan to consider how much money they have in savings accounts, as the majority of lenders now demand applicants have a minimum five per cent of the money they wish to borrow before providing finance.

He adds that although people may like to believe they are able to compare accounts products and make an informed choice about finances, this is not actually the case.

Meanwhile, a recent article in the publication reported that bundling credit cards, transaction accounts and home loans into one package could save home purchasers a significant amount of money.

Written by Mark Hornby