Too many bills often leads to bad creditThe Juice on Bad Credit Finance

 Bad Credit and Second Chance Loans

Bad Credit Finance – Why the lender says NO!

If you’ve ever applied for finance of any kind recently or ever and you’ve had your loan declined you’re probably asking yourself why. Generally the main reason most people are knocked back is due to bad credit in one form or another.What most borrowers don’t know is that the banks and financiers have access to personal information they collect about you that you don’t. Most finance lenders will generally assess and score each application individually in the loan assessment process to see if your application meets their lending criteria and credit guidelines and if they find any bad credit, poor references or something is amiss and out of order you will generally get a No.

In fact if you fall short in any way then the answer will invariably be resounding NO!
Now don’t get the wrong idea…Your credit rating may be fine and healthy; but just because your credit file is clear doesn’t assure you of getting a loan these days. You may be financially over extended, you may have recently changed jobs or your home address, you may be on probation at your new  job or your income may not be enough to pass the lender’s serviceability calculations. They may be a hundred other reasons you don’t qualify but of all these bad credit is the hardest to overcome.


We hope to bring you another article shortly on “How to improve your finance profile so the lenders say yes more often even if you have bad credit.” This article will deal with many of these issues I have just mentioned…and more and is also designed to assist people with bad credit!


This article will assist you to unveil the hidden truths behind Second Chance Loans and Bad Credit Finance.


Hidden Truth One: Request a copy of your Credit File to see if you have bad credit.


The first place to start with bad credit is your humble credit file. The company that administers credit reports for individuals and companies in our country is called Veda Advantage or “Darth Veda” if you have ever had the misfortune of being blacklisted by them because they are the gatekeepers of the bad credit world in Australia. Every country has its own relevant credit body and access to your credit file is generally FREE. You can and should request it as there may be adverse or bad credit entries on your credit file that could affect your ability to get a loan and show prospective lenders you have bad credit when you feel you don’t.


The reason this is so very important is that more so since the Global Financial Crisis (GFC) lenders have put significantly more importance on your credit file when assessing a loan. You need to know where you are going and lenders need to know where you’ve been. Since the GFC all lenders have become harder than ever on bad credit finance so the days of walking in to your bank or finance company and getting a loan with bad credit are well and truly over.


Now, more than ever before, if you want finance you need to toe the line! If you have bad credit you may need to talk to a Second Chance Financier or a Bad Credit Loan Provider.


Your finance credit file will list a number of personal things about you like your full name or any other name you may have gone by, your current and past addresses, your date of birth and licence number and your current employer.


If you disagree with any of the personal information listed on your file I suggest that you contact the Credit File Administrator and get it updated before you apply for a loan.


Secondly and most importantly, your credit file will list any credit you have applied for, any adverse or bad credit notifications listed or file notes for at least the last 5 years. These can include, but are not limited to credit defaults (can be on loans, credit cards, accounts, utility bills and so on), credit judgements (These are defaults that have gone to court), writs, summonses, bankruptcies, debt agreements and so on. All of these entries are construed as bed credit by a prospective lender.


There also could be entries on your credit file that you don’t agree with listing you with bad credit. In these cases they may or may not have been listed in error so remember to take it up with the company that has listed the entry first. Call them and work your way up to a supervisor if you have to but do it for your own sake I assure you.


If you have an adverse credit file and there are numerous entries listed then you have entered bad credit loan territory.


Please don’t fret or despair as there are options available to you. If you have any unpaid bad credit debts then make sure they are paid before you apply for a loan.


Hidden Truth Two: Are your income tax returns and financials up to date?


Whether you are an employee or an employer the simple fact is that if your financials aren’t completed and you want a loan then you may be out of luck until you get your current tax returns done. The first and second rule that any lender works by is: Can you pay and Will you pay? So get those infernal taxation returns done before you apply for a loan. Please remember that these financial reports will provide your prospective lender with a snapshot of your current financial position and if they are really good you may find your finance broker may be able to argue positively against any bad credit on your credit file.


Lenders often say noHidden Truth Three: Don’t lie to the lender…Tell the truth if you have bad credit!


If you are lucky enough to fall into the 1 to 3 percent of people who get away with it then more luck to you. Most lenders have fail-safe credit assessment systems in place to spot any discrepancies…even the little white lies. Don’t chance it! if you get found out, even if it was something you overlooked then you will invariably end up with a loan declinal letter. Get you facts straight and make sure your application is watertight. Lenders and finance brokers respect the truth and if you are up front about any bad credit then a firm methodology can be put in place to assist you.


Hidden Truth Four: Expect Rate for Risk if you have Bad Credit!


The truth is that Second Chance Lenders and Bad Credit Finance Institutions generally charge a higher rate. Their reasons are many and varied but the main one is that if you have a bad credit file or it is tainted or even if your credit profile falls outside normal lending criteria you are perceived as a higher risk. Higher risk in lending generally means a higher interest rate. The positive thing is that using a Second Chance Lender and Bad Credit Finance Provider gives you the opportunity to re-build your bad credit rating. If you are approved, and provided the monthly repayments are within your budget reach then seize the opportunity with both hands. Once you have completed 6 to 12 months of making all of your repayments on time you have made enormous steps to getting that bad credit rating back on track.


Hidden Truth Five: See a Finance Specialist if you have Bad Credit


Since the GFC the finance market is like a battlefield riddled with land mines. You should investigate the possibility of whether you will need an experienced broker or financial consultant to get you through the process unscathed. Unless you really know your way around lending guidelines you may fall foul of lenders going it alone if you have bad credit. The last thing you need is a knock back on your already damaged bad credit file. Sure it may cost you a few bucks extra but your chances of success are in the hands of a professional who has probably spent many years seated behind a lending desk like myself. Do yourself a favour and give it a go…You may be surprised by the results and your bad credit nightmare could transform into a dream come true!
Finance Stress Free is based on the Gold Coast in Queensland Australia an hour’s drive south of Brisbane and provides information on bad credit finance, assistance on bad credit finance and advice on bad credit finance.
If you have bad credit or require bad credit finance, a second chance loan or any further information please feel free to email us at or leave your comments at


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©2011 Bad Credit Finance – 5 Hidden Truths