We find that many people are confused what Bad Credit history means. When we ask clients whether they have any history of bad credit, we are sometimes told, no all my defaults are now paid, or I was discharged from bankruptcy 2 years ago, so my credit history is clean. Not So!
If in fact you have had any defaults, bankruptcy of part 9 agreement, these remain on your credit report for up to 7 years after they are paid. Therefore while paid defaults or discharged bankruptcies appear on your credit report, you will be treated by all lenders as a ‘bad credit applicant’.
This does not mean that you will not qualify for a loan, all it actually means that you can only qualify for loans available to bad credit applicants.
Some of the restrictions placed on bad credit applicants are as follows:
- no unsecured loans;
-no home loans over 80% of the value of property;
- no loans at all if unpaid defaults exist.
To find out if your credit history is clean you can obtain a free copy of your credit report by going to www.mycreditfile.com.au