There are many different things that affect your chances of getting credit. Most of these are well known. Factors such as affordability, defaults, judgements and insolvency are the main factors but there are other lesser known factors that banks take into account.
- The frequency of credit applications
- Applying for a lot of credit over a relatively short period of time tends to indicate financial stress or imprudence.
- The type of credit applied for
- Banks tend to regard applications with non-major banks negatively. Payday loans, renting or leasing home appliances and interest free deals fall into this category.
- Debts repaid
- If you have had a loan in the past, banks like to see that it was paid off. Rolling loans into new loans and frequently accessing home equity is not well regarded.
- The suburb you live in
- Banks have good data on the riskiness of individuals based on their suburbs. Living in a good working class suburb with high levels of home ownership may be better than a prestigious address where big mortgages put people under large financial stress.
- Changing jobs frequently
- Banks value stability. Staying with the same employer is a good indicator of stability.
- Moving frequently
- Not being settled makes banks nervous. People well rooted in a community tend to have good support networks and are therefore less risky.
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