Credit Scoring in Australia
I do quite a bit of daily research into the mortgage marketplace in Australia as this is not only part of my job as a mortgage broker but I also have a responsibility to learn as much as I possibly can, not only about current mortgage offerings and current interest rates, but also such things as interest rates historically in Australia and credit assessment practices.
Quite frankly I find it horrifying how judgements are made about a home loan seeker’s suitability for a loan, in particular when made about relatively new arrivals to Australia, but who am I to tell the banks and other lenders how to do it.
I have come across quite a few comments from “experts” recently that I strongly disagree with. I will give you an example taken from a website:
“Veda Advantage is what is known as a credit rating agency. Veda does not give a rating to your credit file. They merely provide to lenders a list of enquiries on your credit file along with black marks such as defaults. It is the lender that then uses this information to give your loan a credit score which is used to categorise you into a credit rating”.
Compare this pearl of wisdom with an extract from Veda’s own website:-
“A VedaScore summarises Veda bureau information on a credit report into a single powerful number. It means you don’t have to analyse multiple data elements on a credit report to understand an applicant’s credit risk. Using VedaScore as part of your credit assessment process, including review of application form information, helps you to reduce your credit risk losses and improve portfolio profitability.”
Have VedaScore got it wrong? I don’t think so somehow. ‘Nuff said. For more on this topic of credit-scoring please go to http://homeloansadelaide.wordpress.com/home-loans/credit-scoring/