Applying for finance can feel like a big step, but knowing what to do—and what not to do—can make the process smoother and improve your chances of approval. Here’s our guide to getting it right the first time.
DO’S
Close Unused Credit Accounts
Having unused revolving credit accounts like Afterpay or ZipPay can negatively affect your application. Lenders prefer to see fewer open lines of credit, so closing these accounts can work in your favour.
Save, Save, Save
A healthy savings habit shows lenders you’re financially responsible. The more you save, the better your position will be to secure finance.
Keep Your Payments on Time
Paying bills and existing loans on time demonstrates reliability. Lenders look closely at your payment history, so staying up to date is crucial.
Earn Extra Income
Working additional hours or taking on extra shifts not only boosts your savings but also increases your serviceability, making your application stronger.
Maintain Positive Account Balances
Overdrawing accounts or having insufficient funds can raise red flags. Always keep your accounts in the green to reflect good financial health.
DON’Ts
Avoid New Credit
Taking out new loans or credit cards while applying for finance can hurt your application. It increases your liabilities and suggests you may not manage money well.
Don’t Spend Your Savings
Dipping into your savings can weaken your application. Keep your savings intact to show you’re financially prepared.
Don’t Change Your Employment Status
Stability is key. Switching from full-time to casual or reducing your working hours during the application process can make lenders hesitant.
Avoid Missed Payments
Missing repayments on loans or credit cards can severely impact your credit score and reduce your chances of approval.
Why these steps matter.
Lenders assess your financial behaviour and stability to gauge how likely you are to meet repayments. Following these do’s and don’ts demonstrates responsibility, increases your creditworthiness, and positions you as a strong candidate.
Need guidance? We’re here to help.
Navigating finance applications can be tricky, but you don’t have to do it alone. At FQ Finance, we’ll guide you through every step of the process to help you simplify your journey and maximise your chances of success.
Ready to start? Contact us today for a free finance health check.
