Mark on credit file by "applying for borrowing capacity"

My contact at the bank said he was going to send off to credit to see my borrowing capacity? Does this mark my credit file?

I thought only formal applications mark your credit file?

 

Yes it will - they're submitting an application.

A borrowing capacity check doesn't require an application to be submitted!

Normal practice for banks though - they like to try and trap you.

 

What is the purpose of this and why would they do that?

 

Can't say it enough, get yourself a good broker that acts in your best interests.

As Jamie said, to trap you. Although a bank would probably claim to give you more accurate informed service.

 

You really are best of contacting a broker to find out borrowing capacity. Going from Bank to bank is inefficient, and as you've found can result in unwanted credit enquiries. Depending on your situation this can effect the success when you actually do want to apply for a loan.

 

Thanks for the feedback. Could someone please explain how this would "trap me"?

 

also don't they have to put a nominated sum on an application? I haven't asked for anything specific......What would he be putting as the proposed loan amount?

Also, I made an application with him only two months ago. I was originally declined due to insufficient financials. In the end, they approved me at the last minute as I produced more financials. However by then, I was approved with another lender and went with them.

My question is, would he just be continuing the same enquiry from last time? As I haven't signed any new consent forms..... Also would they do another credit check from only 2 months ago?

 

You're potentially causing yourself some long term problems going down this current path - by the sounds of it you already have a number of credit hits piling up on your file, over time this can make your credit file look quite sick if not properly managed. Instead of heading in branch and getting hit with another hit each time, go speak to a broker who can look at your specific situation and provide advice on the BEST lenders + products to use to achieve your goals.

 

Thanks for the advice and I will certainly take it I think.

Just out of curiosity though, are enquiries really that bad? Especially if I'm showing that I have a loan for each enquiry and not wasting peoples time....

 

No response, no worries, I'll ask the banks why.

 

The majority of lenders are now using computer generated credit scoring, which take into consideration a huge array of data, including number of credit enquiries. Some lenders systems will auto decline you regardless of the strength of the application if you have too many hits.

Standard practice to try lock in customers, can make them feel that they have already progressed with the lender and shouldn't go elsewhere. All an attempt to make a client 'sticky' than look after the clients best interests (which may not be with that specific bank.

 

Hi Rolf,

The application I signed was for a different property that already settled last month with a different lender. He said he would resubmit to credit to see my borrowing capacity....