“If you’ve borrowed in the past but then made your payments late or missed them altogether, this will show on your credit history...”
What's my credit history like?
Your credit history is likely to play a part in your decision. This is your record of borrowing and it includes all your financial commitments and your management of them over the past six years.
If you’ve borrowed in the past but then made your payments late or missed them altogether, this will show on your credit history. If you have always made your payments on time and cleared your balance each month, rather than only paying the minimum, this will also show. And it’s easy to see which credit history will most reassure the lender, and which will set alarms bells ringing.
Be aware that if you’ve never borrowed, you will have a very limited credit history, which means that it’s difficult for lenders to determine how responsible you are as a borrower and whether you’ll struggle to repay them. So having no credit history can also stand against you when you apply for credit. However, there are lenders who specialise in applicants with a limited history of borrowing.
Another thing to keep in mind is that when you apply for credit, that application leaves a mark on your credit history. Lots of these marks left close together can give the lenders who look at your credit history the impression that you’re desperate to borrow, and this could prompt them to turn your application down.
To keep your applications to a minimum, you need to have a good idea of the types of products and lenders that will accept you. For instance, if you’ve had difficulties with borrowing in the past, you may struggle to get the best deals on the market. You can use Ocean QuickCheck to get an idea of whether you qualify for a new credit card from us. This should help you narrow your search and keep your applications to a minimum.
Similarly, the Ocean Smart Search eligibility calculator will tell you whether you’ll be accepted for a homeowner loan before you apply, and it won’t affect your credit history.
Still want to know more about your credit history? You can find our comprehensive credit score guides here.
“Take your time to see what's available, and what most suits your needs...”
What type of loan or credit card should I choose?
If you’ve decided to apply for a loan, you need to ask yourself which type of loan is best for you. A homeowner loan – also known as a secured loan – is secured to your property. This gives your lender a safety net, because if you don’t keep up with your payments they can, as a last resort, get back the money you owe them by repossessing your home. A personal – or unsecured - loan is not secured against your property so you don’t need to be a homeowner to apply. However, you can borrow less with this than a secured loan and the interest rate is likely to be higher.
And if you decide a credit card is more suited to your requirements, you’ll need to find the right type for you. There are lots of different credit cards and they all offer different things. Some can be used to consolidate existing debts, while others offer you rewards as you spend. Take your time to see what’s available, and what most suits your needs.
We hope we’ve made the differences between credit cards and loans a little clearer and helped you make up your mind about the one that’s right for you.