As part of the approval process when applying for any type of finance, the lender will run a thorough check on the applicant’s credit file to determine their eligibility to secure funds and gain insight to their credit track record.
This will show each time someone has attempted to borrow credit, what their borrowing capacity is, as well as any default listings. A default is placed on your credit file when payment is not met, sometimes hindering your loan application.
A credit file also contains personal information and is typically kept for a period of seven years. Different forms of bankruptcy and information pertaining to that period, default judgements and public record information will be shown on file.
While usually, once a default is listed, even if has been paid, it can act as a black-mark against your name, there are ways around having a default removed.
This is where talking to a mortgage broker can help understand the important role a credit file plays and can advise you of the different requirements by different lenders. Find out your options.
