My experience getting a mortgage with a bad credit report

Written by Mike

Topics: Banking, Loans, Mortgages

I would like to share my experience getting my first home loan in Australia. I was walking around one day and came across a great looking apartment. It was close to my work, and it was on the top floor of the apartment block, so it had some nice views across the nearby parkland. I made an appointment with the real estate agent to see the apartment. It was everything I was looking for and the price seemed good. I didn’t want to miss out. I was gainfully employed, so I didn’t think I would have trouble getting a mortgage.

I wanted to show that I was serious in the property, so the agent said I could pay any amount of money as a deposit. So I wrote a cheque for $100. The next day, I started visiting banks during my lunch break. One bank had what looked like a special promotion, so completed a pre-approval application. I started moving some of my money around, as I wanted to pay at least 30 per cent as a deposit and get a mortgage on the remaining amount.

Everything seemed to be going fine with my loan application and then it hit a snag. A couple of years before that, I rented a car. My friend ended up taking back the car. There weren’t any problems, but for some reason they never charged my credit card. I remember giving them my credit card when I first rented the car.

Sometime after that the company had an audit done and they found that they were missing my payment. Letters of demand were sent to my old address. They eventually found my new address and I ended up paying the bill. The problem was that this event ended up on my credit report. In Australia these records last for five years.

The bank who I was dealing with said that this was a problem, but they said they would try to resolve it. I explained what happened and how I had paid the bill, so I couldn’t understand why it would be a problem. So I went to the bank who I had been dealing with my whole life. I don’t know why I didn’t go there in the first place. The bank promised that you could get approved for a loan in 24 hours. I explained the story to the loans officer, who was very friendly and helpful. She said it wouldn’t be a problem. In record time, I was approved for the loan.

The following day I had a call from the first bank who I made the application to, and they said that my loan had now been approved. I explained that I had already found a bank, who would give me a loan. That loan officer was not happy with me. She told me how hard she had worked to get my loan approved. She was obviously disappointed that she wouldn’t be getting her commission.

I didn’t really feel sorry for her as the bank made a big deal about the problem with my credit report. My bank who approved the loan, hardly flinched when I explained the story to them. It was my first experience dealing with credit reports and I felt annoyed that you could so easily get a bad mark on your name and it is impossible to get it removed, even if you pay back the debt.

I don’t recommend people getting into debt buying luxury items that they cannot afford, but I believe it is a good idea to build a credit history, by taking our personal loans for essential items, like a car or business equipment. Get Approved is one company that offers fast pre-approvals, so you won’t have the same trouble I had when buying my house.

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