Wednesday, July 3rd, 2019 - Headland Storage

Many people who have applied to a major bank for a home loan and been rejected because of a bad credit rating falsely believe that this is the end of the line. If you take the rights steps and understand why your credit rating is bad, you’ll improve your chances of being accepted. Also, if you do have a bad credit rating, the last lenders you should approach are the big banks and mainstream mortgage lenders.

Understanding how you have a bad credit rating

Defaults and late payment history will stay on your credit report for five years, while bankruptcies remain for seven years. There are four main ways that credit ratings are adversely affected:

  • Unpaid bills or late payments

This is the main culprit. It’s easy to miss a payment or make a late payment. If you pay utility and credit card bills by direct debit your chances of doing so will be minimised.

  • Unpaid bills or late payments

If you apply for a loan and it is declined, this shows up on your credit report. Other lenders will view the decline as a negative, believing that the rejecting lender has found something that they have missed.

  • Making too many loan applications

When you apply for a loan and your credit rating is checked it shows up on your credit report. Making a lot of loan applications in a short space of time looks as if you are desperate for credit, and is taken as a sign by lenders that your finances are in bad order.

  • Bankruptcy

If you have taken the ‘easy way out’ and been declared bankrupt, your credit rating will be destroyed immediately and stay on record for seven years.

7 steps to making a home loan application when you have a bad credit rating

If you understand why you have a bad credit rating, you’ll be in a stronger position to make an application for a home loan. Here are seven steps that will help your chances of being approved:

  1. Get a copy of your credit report
  2. Take action to settle outstanding debts
  3. Use a mortgage broker to access specialist lenders
  4. Be honest on your application and explain poor credit history
  5. If your spouse has bad credit, apply for your loan in your name only if possible
  6. Don’t make too many applications in a short space of time

Don’t give up hope, but approach getting a loan in the right way

Big banks and mortgage lenders are notorious for refusing home loan applications from people with even the slightest blemish on their credit report. If you apply to specialist lenders through a mortgage broker, and ensure you are open and honest throughout the application process, you will increase your chances of being approved for a home loan despite your bad credit rating.

In the meantime, try to eliminate any outstanding loans and maintain loan, credit card, and utilities bills by ensuring they are paid on time every month.

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Headland Storage


Headland invests in Hänel systems, utilising seven large Hänel automated vertical storage systems to manage its national spare parts inventory for field engineers and customers. Combining the latest technologies, the national team of field engineers is comprised of a service support centre based in Melbourne, with an additional regional service team located in Sydney. Being the only supplier in Australia with it’s own established, factory trained team of engineers located across both Australia and New Zealand, customers are assured that Headland Service will provide prompt response, service delivery and support.



P: (03) 9244 3500
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SMSF Loans Co


At SMSF Loans Co, we do everything in our power to ensure our customers have a long-term SMSF investment strategy that works! We’ll help you get better results from your self-managed superannuation fund by helping you invest in properties through loans.



W: smsfloansco.com.au/

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Bad Credit Rating, SMSF Loans, Financial Advice, Retirement

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