Approved With Bad Credit and a Recent Rejection
Whenever there is a holiday coming up like Christmas or Easter, we almost always have a few customers come to us needing a fast resolution.
What seemed like plenty of time when they first started looking turned into not much time after being rejected by another lender.
No matter the lead up work, we always aim to get the keys in your hand before the holiday period so you can hit the road for the break unrestricted.
This week’s customer story had some major hurdles to overcome, and a tight deadline to boot.
Scenario
We spoke to this customer on the Monday before Good Friday.
He had his eye on a 2012 Mitsubishi Triton from a local Townsville dealership, priced at just over $20,000.
While he had a stable long-term job, there were other curveballs with this application.
The Roadblocks
His Credit Score was sitting at 431 which is at the lower end.
Some good options were still possible, but we would have to walk a fine tightrope to get there.
The main issues were:
1. Two defaults on credit report
This was the main detractor from the credit score
One was paid, but another was still to be finalised.
In fact, this issue alone had led to a recent rejection by a previous lender.
2. Messy Banking Conduct
We can often overcome a low credit score by submitting detailed bank statements to a lender for scrutiny.
If you are managing your budget well, this can be a big plus; if you are not, it can do more harm and you may not be ready for additional credit anyway.
In this case, there were some positives and a small sprinkling of high-risk indicators.
For example, a couple of dishonoured payments that had incurred unnecessary bank fees.
There was also a small payday loan with $50 remaining.
Not great signs, but not alarming either.
3. Split Banking Activity
The final challenge was being able to present the complete financial picture using bank statements.
Most lenders will only accept them digitally, and our customer was using a second account heavily that was incompatible with the system.
So we also had to find a lender who would accept manual bank statements in addition to the digital ones from his main account.
The Gusto Strategy
What are the chances we had a lender that could accommodate all three issues?
Well, we had just the one.
And given the tight timeframe to resolve we had to move fast.
We had to jump on the phone to explain the complexity of the information being submitted. They took a very pragmatic view of his situation and recognised the positive progress that had been made.
Combining this with his stable long-term employment history and we were able to get an approval over the line.
The Result
Once we secured the approval, it was a race against time to beat the approaching public holidays.
We got the documents signed, settled the deal on the same day.
Funds were transferred to the dealership overnight and the customer was able to pick up his Triton just in time for the Easter long weekend!
The Takeaway
When your credit file has some blemishes, it can be a very narrow pathway to an approval.
If you apply directly to a lender you are hoping that their policies align with your specific circumstances, and in many cases it just doesn’t happen, resulting in more damage to your credit score.
Having a good broker in your corner that knows what will fit within a credit policy and what will not, is essential to getting a result in these circumstances.
That and we are not afraid of pushing a lender to hurry up with a deal before heading off on a holiday.