Your credit score reflects your reputation as a borrower and affects many aspects of your financial life. In Australia, one’s score usually sits anywhere between zero to 1,000 or 1,200, depending on the credit reporting agency. 

Having a high credit score helps in loan and card applications because it signals financial responsibility and the capacity to pay your obligations. Lenders will be more likely to accept your application or offer you a higher borrowing capacity.

High credit scores offer apparent advantages, but what about bad credit or no history at all? Is having a low score better than not having any history, or is it the other way around? If you fall into either of these categories, read on to find how your situation can impact your finances.

Having No Credit History: How Can It Affect You?

Everyone has to start somewhere, and having no history isn’t necessarily a bad thing. It just means you have not applied for credit in the past. The reasons for your lack of track record does not matter much—many people prefer paying in cash or have just recently gotten their finances in order. 

Although not using credit cards or taking out loans can help you avoid accumulating debt, a completely blank history will make it difficult for lenders to trust you should you ever need to qualify for financing. 

Many banks and lending institutions will hesitate to let you borrow money from them because you do not have sufficient proof of your financial responsibility. While it may be true that you haven’t missed payments for your obligations, they may still reject your loan or card application.

Building a Credit History

Having no track record is relatively easy to remedy. You can apply for a card that’s fit for individuals with no credit, such as a secured credit card or one with a low spending limit. 

Taking out secured personal loans also can help you build credit. In these transactions, you’ll have to give a security deposit for the spending limit. Ensure that you always make on-time payments, and your score should go up.

Having Bad Credit: How Can It Impact You?

Bad credit usually has more disadvantages than having no credit at all because the records will show your past transactions. You may not have paid your obligations on time, which is a red flag for most institutions. However, it's a surprisingly common problem and is not impossible to overcome. Additionally, you can still get loans from bad credit mortgage lenders and the like.

Improving Your Bad Credit Score

The first step to improving your credit score is to stay on top of your obligations and start paying bills and debts on time. Credit repair professionals can also help you if you struggle on your own. With regular on-time payments, you can steadily get your score back up again.

Apply for Bad Credit Mortgage Loans Today

Having no track record is easier to remedy than having a bad credit score because the latter is typically a red flag for financial managers at most banks and lending institutions. However, both of these common issues are remediable. By taking available loans and paying them on time, you can work on steadily building and improving your score for more competitive financing.

If you’re looking for bad credit mortgage lenders in Australia, Wealthy You can help. We’ll provide you with the best possible rates, interests, and terms to help you meet your financial needs. Contact us and apply today!