The short answer is yes: if you make multiple loan applications in a short time period, then it is likely to have a negative impact on your credit score. Show Loan applications will always be visible on your credit file, although credit reference agencies (CRAs) do not have to report whether the application was successful. Loan applications will remain on your credit file for two years, loan repayments however will remain on your credit history permanently. Responsible lenders will always run a ‘hard’ search on your credit history when you apply for a loan, and this search will impact on your credit score. However, it is not hard to get your rating back up through sensible financial behaviour. Applying for loans a couple of times every few years is pretty normal, so CRAs are unlikely to worry about this. The thing to avoid is making simultaneous loan applications or making multiple loan applications over a short period of time. Lenders will be able to see the number of applications and view you as a higher risk. Even though lenders can’t see if your applications are successful, they can infer by a lack of loan repayments that your applications were unsuccessful. Applying for a home loan can be a nerve-wracking and time-consuming experience. But the last thing would-be borrowers want to do is hurt their chances of approval by making easy mistakes. Making multiple home loan applications can have adverse effects on your credit history, credit score and your likelihood for approval from any one of the lenders. Let’s explore how credit reporting bureaus grade events in your credit history and how to present yourself as an ideal borrower. Why multiple applications may hurt your credit reportThere are two major credit reporting bureaus in Australia: Experian and Equifax. These bureaus keep a record of everyone above the age of 18’s credit history and activity and operate with a scoring system divided into five tiers.
Source: Experian.com.au, Equifax.com.au. Your credit history will include both positive and negative events, including:
Submitting an application for a home loan falls under the category of ‘credit applications’. If your plan is to make multiple applications to even out the odds of rejection in hope that one will be approved, this may backfire. Lenders will look at your credit history when you apply. If it shows multiple credit applications open at once, this displays a level of poor financial behaviour to the lender. Put simply, lenders see an individual making multiple applications as risky. It does not showcase a level of stability or creditworthiness that indicates you can service a home loan. Further, if your home loan application is rejected, this will be reported on your credit file, and it may hurt your credit score. If multiple applications are rejected, this may have a severe impact on your credit history and limit your chances of being approved for any credit products. Instead, would-be borrowers should focus on applying for one home loan at a time and prioritise boosting their applications as much as possible to meet the lender’s eligibility criteria. How to become an ideal borrowerMortgage lenders must follow strict serviceability requirements when deciding who to lend money to. This helps lower the risk of a borrower taking on too much debt and falling into arrears or defaulting on a loan. This is why home loan applications have eligibility requirements that borrowers must meet in order to be approved, including:
Knowing this, it may be possible to boost your chances of home loan approval by presenting yourself as an ideal borrower. This may be done by becoming the best possible outcome of each eligibility requirement. Being an ideal borrower may look like:
Did you find this helpful? Why not share this article?  Alex Ritchie Alex Ritchie is a Personal Finance Writer and Editor at RateCity, and has been writing about Australian finance for over five years. Her expertise and passion covers loans, credit, superannuation, and closing the gender pay gap, and she aims to help young Aussies to overcome their financial apathy. Alongside RateCity, Alex has been published in numerous publications, including Australia's Money Magazine, Business Insider, Lifehacker Australia, and in health via NPS MedicineWise. Do multiple pre approvals affect credit score?So even if you get preapproved with, say, three lenders, your credit score will drop by just a small number of points. Just make sure to apply for all your preapprovals within a few days of each other. That way, each hard inquiry will be counted as a single inquiry for credit-scoring purposes.
Can I get pre approved from more than one lender?Is it OK to get preapproved by multiple lenders? Getting multiple credit checks for the same purpose, such as mortgage preapproval applications, won't negatively affect your credit score.
Does getting prequalified multiple times hurt your credit?Prequalification is typically considered a soft inquiry, and it won't hurt your credit all on its own. In fact, it can be a helpful tool for lowering your risk of being rejected for a new credit card.
Do multiple inquiries count as one?If you're shopping for a new auto or mortgage loan or a new utility provider, the multiple inquiries are generally counted as one inquiry for a given period of time. The period of time may vary depending on the credit scoring model used, but it's typically from 14 to 45 days.
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Will applying for multiple mortgages affect credit
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