Compare Mortgages & Home Loans
| Provider | Features | Apply |
|---|---|---|
| Rams Home Loans |
|
 |
| HSBC Home Smart Loans |
|
|
Free Credit Check
Are you having trouble getting approved for credit? Chances are your credit rating is causing the problem. Credit ratings can make or break your application-after all, they are your lender's main criteria for assessing your risk. Before applying for a loan, it helps to get a free credit rating to see what your chances really are.
That's what we do here at Free Credit Check. Understanding credit ratings and histories can be a challenge, and we want to make it easier for everyday borrowers. We don't favor any lender or broker-we only work to inform the public and help them make wise financial decisions. Get started by going through our article database to learn more about credit checks and ratings.
What are credit checks?
Credit checks are used to determine your credit score or rating, which potential lenders will use to assess your risk level as borrower. A higher rating basically means that the person is good at handling credit, and is less of a risk to the lender. Banks perform credit checks on all loan applicants, but they usually charge you for this along with other extra fees. If you want, you can get a free credit check on your own to save them the trouble (or keep a copy for yourself).
Who does your credit ratings?
Credit scores are calculated by companies known as credit reporting agencies. The major reporting agency in Australia is the CRAA, while in the US it is shared by three major providers: TransUnion, Equifax and Experian. Some lenders also have their own rating system, although they usually base them on official ratings as well. Lender ratings are determined in part by the risk level associated with specific products; for example, a poor credit loan is always of higher risk than a standard personal loan.
How are credit ratings determined?
Rating systems vary from one region to another, but they take into account the same factors. These include:
Payment history. This is a record of all the bills issued to you by other lenders. Early and on-time payments earn you high points on credit checks, while missed or late payments will reflect badly. Lenders may also look at utility bills such as phone and electricity.
Financial stability. Your lender will want proof that you have a regular source of income with which to repay the loan. A long-standing permanent job, a home, and good bank statements are signs of an applicant's financial stability.
Existing debts. Even if your income is sufficient to cover the loan, lenders want to know that you'll still be living within your means. If you are paying off five other loans, you may not be able to handle a new one. In Australia, the limit is usually 30%; that is, the repayments should not take up more than 30% of your total income.