25% of Aussies think their credit score will hinder them from loan approval, a new survey shows... Mortgage insurance pushes borrowers towards bankruptcy...
One quarter of Aussies fear loan rejection based on credit score
Credit scores appear to be a significant fear for one in four Australians who think it could stop them getting a loan, a survey by finder.com.au reveals.
Gen Y held the greatest concern that their credit score would impact their ability to borrow while the majority of Australians (67%) said they didn't expect a lender to reject an application based on their credit score.
The national survey, of 2,033 respondents, also found that 8% of Australians are complacent with ‘no opinion’ on what consequences their credit score might have on their ability to borrow.
Money Expert at finder.com.au, Bessie Hassan says, “People often don’t realise the consequences of a poor credit history until they get knocked back applying for credit. A shaky history of paying bills on time and outstanding debt directly impacts your credit score.
"Knowing your credit score allows you to apply for credit with confidence; you may be pleasantly surprised with your score. At the very least it can save you from unexpected rejection and be the catalyst for positive change."
Mortgage insurance pushes borrowers towards bankruptcy
As Australia’s mortgage insurance providers force struggling homeowners into bankruptcy, a bank analyst has revealed that most Australians don’t understand that their policies favour lenders, not borrowers.
Over the past decade, QBE LMI and Genworth Financial – Australia’s two main mortgage insurance providers – have launched bankruptcy proceedings against dozens of homebuyers to recover debts from mortgage defaults.
According to figures from the Australian Prudential Regulation Authority (APRA), borrowers spent almost $500m on about 100,000 lenders mortgage insurance (LMI) in the first half of the year. LMI is compulsory for all borrowers who do not have a 20% deposit.
However, borrowers have a different understanding on what a mortgage insurance policy does.
“Around 70% of households believe that lenders mortgage insurance protects them rather than the lender,” banking analyst Martin North told ABC.
“So it’s not totally clear to them that this is something that protects the bank rather than the borrower and I personally think that there needs to be better disclosure with regard to this particular product set.”
(Your Investment Property)
Credit scores appear to be a significant fear for one in four Australians who think it could stop them getting a loan, a survey by finder.com.au reveals.
Gen Y held the greatest concern that their credit score would impact their ability to borrow while the majority of Australians (67%) said they didn't expect a lender to reject an application based on their credit score.
The national survey, of 2,033 respondents, also found that 8% of Australians are complacent with ‘no opinion’ on what consequences their credit score might have on their ability to borrow.
Money Expert at finder.com.au, Bessie Hassan says, “People often don’t realise the consequences of a poor credit history until they get knocked back applying for credit. A shaky history of paying bills on time and outstanding debt directly impacts your credit score.
"Knowing your credit score allows you to apply for credit with confidence; you may be pleasantly surprised with your score. At the very least it can save you from unexpected rejection and be the catalyst for positive change."
Mortgage insurance pushes borrowers towards bankruptcy
As Australia’s mortgage insurance providers force struggling homeowners into bankruptcy, a bank analyst has revealed that most Australians don’t understand that their policies favour lenders, not borrowers.
Over the past decade, QBE LMI and Genworth Financial – Australia’s two main mortgage insurance providers – have launched bankruptcy proceedings against dozens of homebuyers to recover debts from mortgage defaults.
According to figures from the Australian Prudential Regulation Authority (APRA), borrowers spent almost $500m on about 100,000 lenders mortgage insurance (LMI) in the first half of the year. LMI is compulsory for all borrowers who do not have a 20% deposit.
However, borrowers have a different understanding on what a mortgage insurance policy does.
“Around 70% of households believe that lenders mortgage insurance protects them rather than the lender,” banking analyst Martin North told ABC.
“So it’s not totally clear to them that this is something that protects the bank rather than the borrower and I personally think that there needs to be better disclosure with regard to this particular product set.”
(Your Investment Property)
