How we secured $37k with 3 credit defaults
When a lender looks at a credit file and sees multiple defaults they will almost always jump to an instant decline.
An unpaid default means you borrowed money and simply walked away. It is one of the biggest red flags in the lending world.
But a credit score is only one part of a risk assessment, and some lenders specialise in the all the other stuff that can offset a questionable past.
You just need a broker who knows how to highlight your strengths to balance out the risk, while also being prepared to take your medicine on costs while you repair the damage.
Scenario
A customer from Foster in regional Victoria (just south of Traralgon) came to us looking to finance a 2021 Nissan Navara through a local dealership.
He works as a dairy farm manager and needed a reliable $37,000 vehicle.
While his income was strong, his credit file was not, and getting a loan of that size approved was going to require some careful planning.
The Roadblocks
- Multiple Defaults: His credit score was being dragged down by three separate defaults.
- Outstanding Debt: While one default for a $380 credit card had been paid, he had two unpaid defaults actively showing on his file that were now with debt collectors.
- The Loan Size: Securing a small loan with bad credit is one thing. Securing a chunky $37,000 lend with active defaults is incredibly difficult.
The Gusto Strategy
We had to build a rock-solid case to prove to the lender that his past credit issues did not reflect his current ability to repay a loan. Fortunately, he had two important green flags working in his favour.
First, his employment stability was incredible. He had been working full-time as a farm manager at the exact same dairy farm for 14 years.
To a lender, that kind of job security is gold.
Second, his banking and budget management was flawless.
His statements showed consistent, high income, absolutely no payday loans, and low living expenses (as his adult children help him cover the rent).
We took his file to a specialist lender on our panel who may be willing to look past a very old default.
Our broker advocated for his situation, pointing out that his largest default was nearly five years old and about to fall off his report entirely, while his current banking proved he was a safe bet today.
The Result
The strategy worked. We secured a full $37,000 approval, and the loan settled in exactly one week.
Because of the active defaults, the interest rate was 23.99%.
While we had a few lenders willing to look at the deal, we specifically placed him with this lender because they offered the lowest fee structure for his profile.
It is a high rate, but it solved an immediate problem and got him the exact car he wanted.
Now, he can focus on making consistent repayments to rebuild his credit score and look to refinance to a much sharper rate in the future.
The Takeaway
Having unpaid defaults on your credit file makes getting a car loan extremely difficult, but it doesn’t make it impossible.
A great broker knows how to use your employment stability and clean banking habits to prove your financial reliability and get the deal over the line.