14 days left on our Christmas Countdown, and we wanted to share a positive redemption story for anyone looking to make positive changes in 2026!
The big lesson in this customer story is no matter your situation, there is a pathway towards loan approval.
Sometimes you just need to understand what is holding your credit profile back.
If you can take the targeted action needed, you can be back on track in a matter of months!
Customer of the Week!
This customer came to us way back in June and needed a cheap car ASAP.
However, there were three big problems that prevented him from qualifying for any kind of finance at the time.
Fast forward six months, and he has secured a loan approval just before the holiday season.
What was the difference?
Let’s start with the three major challenges and what he did to address them.
Problem 1: A low credit score in the 300’s
The customer was regularly using short term, high cost, cash lending through a well known lender.
Every time he applied for credit it was listed as an enquiry on his credit file, which was slowly eating away at his credit score.
Frequent loan applications will often have this effect.
A series of loan applications in a short period of time can indicate that someone is not managing their budget well.
To make matters worse, he was behind in his repayments.
Problem 2: Frequent payment reversals in bank statements
Every missed loan repayment lead to an overdrawn bank account, and subsequent payment reversal.
With a hefty bank fee to boot!!
This is one of the reddest of red flags to a future lender.
A track record of being unreliable, while also wasting money on bank fees doesn't scream good financial management.
Problem 3: Lack disposable income to repay a car loan
If we ignore the first two problem, the fact was that he just couldn’t afford the repayments on a small car loan.
He needed to get his expenses down, or his earnings up… Or both.
Action Plan
After conducting our preliminary assessment it was clear that he would not qualify for a loan.
So our brokers took the time to walk the customer through each problem and what he could do about it.
The plan was very simple:
- Stop taking out short term cash loans. A few months with no repeat applications will improve his credit score.
- Contact the lender to repay all missed payments, and meet future repayments.
- The customer was also going to seek additional shifts at work to increase his earnings.
Fast forward a few months and the short term lending had all been paid off!!
That money could now go towards a car loan.
He had also picked up some extra work and his earnings were consistently higher.
The cherry on top, was a small improvement in his credit score due to the time that had lapsed without further high cost credit loan enquiries.
All three of the immediate problems had been addressed, and we were able to secure a loan approval for $10k in no time!
These stories often finish by acknowledging the work our team have done to find a solution in a tricky situation, but this week it is the customer who deserves all the recognition.
The solution was there all along, but he had to make the changes required to be eligible.
Not only does he have his new car, but he has developed some positive financial habits that will increase his choices in the future.
How to Navigate Financial Trouble
Even the small changes we saw in this week's story led to a vastly different outcome in just a few months.
And most of the actions revolved around avoiding further damage to his credit file, rather than any drastic improvements!
But there is much more you can do to prepare for a loan application in the future even if you have had some recent trouble.
In addition to your credit file, lenders also consider:
- Stability of income.
- Sound expense management.
- Savings that you have accrued.
- Improved recent repayment history on other debts
You can learn all about the problems and solutions in this week's article.
Read the full article here