{"id":2673,"date":"2014-03-05T18:55:15","date_gmt":"2014-03-05T08:55:15","guid":{"rendered":"http:\/\/wordpress-371694-1179511.cloudwaysapps.com\/?p=2148"},"modified":"2018-07-24T14:21:10","modified_gmt":"2018-07-24T04:21:10","slug":"bad-new-credit-scoring","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/bad-new-credit-scoring\/","title":{"rendered":"How bad is the new credit scoring?"},"content":{"rendered":"

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12 March hardly sounds like a key date in history.\u00a0 But, for those looking to get a loan, 12 March 2014 could be a key date that determines whether or not this happens and this is due to significant changes in how credit scoring works.<\/p>\n

The most important step in understanding these changes is to first look at what credit scoring is because I know that it has caused some problems with clients from time to time.<\/p>\n

In “simple terms”, credit scoring is a mathematical formula that uses complex algorithms to assess a loan application against that person’s score card that is based on a huge range of historical data.<\/p>\n

The significance of this is huge and with some lenders is the first criteria applied in deciding whether to even consider a loan application. With others, they will take the credit score into consideration but will still assess the deal in its own right notwithstanding the credit score so straight away, you can see that your credit score is the be all and end all with some lenders but not others and knowing which lender does what is simply not possible for a layman to know. What makes it even more confusing is that some lenders do not credit score but the mortgage insurer that they use does, so even though a loan can be approved by a lender, it can be declined by a mortgage insurer.<\/p>\n

You can access your credit reports from Veda<\/a>\u00a0and, at the time of writing this article, you can either pay to get them quickly or wait 10 days and get them for free. You may have to spend some time on the websites finding how to get them for free as it is not always obvious. The option to pay for your report is there but dig around and you will find the free option.<\/p>\n

A credit score is made up of a number of factors:<\/p>\n