Recent information from the Australian Bureau of Statistics reveals that Australians are putting the focus back on to borrowing for home ownership. Figures show owner occupied housing has stabilised and slightly increased, but that people are borrowing less for other personal reasons and investing less.

Here are key figures from the ABS Lending Finance report from June.


May 2011 Jun 2011 May 2011 to Jun 2011
$m $m % change

Housing finance for owner occupation(a) 13 752 13 882 0.9
Personal finance 6 852 6 891 0.6
Commercial finance 30 544 30 443 -0.3
Lease finance 401 394 -1.7
Housing finance for owner occupation(a) 14 131 14 127 0.0
Personal finance 7 050 6 993 -0.8
Commercial finance 31 984 29 897 -6.5
Lease finance 403 374 -7.2

(a) Excludes alterations and additions


With personal finance declining, this may be a reflection that more people than ever are using credit wisely. Perhaps less people are caught in the cycle of borrowing too much for non-appreciating goods.

With the focus back on to owner-occupied housing – it will be beneficial for people to ensure their credit file accurately reflects their ability to repay debt. Especially considering lenders are still making it fairly tough for people to secure a loan.

If people have defaults, writs or Judgments on their credit file, generally they are denied access to a home loan in the current market, regardless of their savings record or wage. This can be devastating. Adverse listings remain on the credit file for 5 years – so something a person experienced 4 years ago can still have a major impact on them today.

Often people only find out about their bad credit rating when they have emotionally, legally and financially committed to a house contract. Typically all the approvals are set to go, and it is not until the credit check that it is revealed that their credit record contains defaults, meaning their home loan is declined.

If only they had known that under current legislation in Australia, they could conduct a FREE credit file check with each credit reporting agency once a year! They could have done this prior to looking for a home, and would have been alerted to the adverse listings, and been able to deal with any inconsistencies before the matter was urgent.

If people find listings on their credit file which are incorrect, contain errors within the listing, or are unjust and simply shouldn’t be there they do have the right to have them removed. The problem is this process can be time consuming – and borrowers can often lose the house they have under contract.

Many clients say “fixing my bad credit is the most difficult thing I have ever tried to do.” This is because the onus is on the credit file holder to prove the inaccuracy of the listing, and negotiate its removal. Many creditors saying that they will only mark the listing as paid and will not remove the default. But this is not enough to ensure finance approval in most cases.

But people should know, that with the right tools there is a good chance their credit file can be completely cleared.

So what can house hunters do to improve their chances of loan approval?

Apart from save like mad and have a good steady income…

(1) Obtain a copy of their credit file

(2) Check for any inaccuracies

(3) If there are errors, negotiate with creditors to remove the default/s, or contact a credit repair company for default removal

(4) Apply for a home loan with a clear credit rating and be provided the choice of a selection of home loans at the best interest rate on offer today.

Contact MyCRA Credit Repairs for information on credit repair.

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