Thursday, 2 October 2025

3 Things Lenders Check BEFORE Approving Your Loan 

If you’re thinking about applying for finance — whether it’s a car loan, personal loan, or home loan — there’s one thing you need to understand:

Lenders don’t just look at your income.
They look deep into your financial behaviour — long before you hit “Apply”.

And if you fail even one of these key checks, you’ll likely get declined, leaving a nasty mark on your credit file that makes the next application even harder.

So before you apply, make sure you understand the 3 things lenders check BEFORE approving your loan:

 

1. Your Credit Report (Not Just Your Score) 

Most people think lenders just check your credit score — wrong.

They actually go through your full credit report, hunting for red flags like:

  • Late or missed repayments (even one can kill the deal)
  • Defaults — paid or unpaid
  • Too many recent applications (known as “inquiries”)
  • Court actions or debt collectors

Even if your score looks okay, these hidden marks can trigger an instant computer decline before a human even sees your application.

 

2. Your Bank Statements & Spending Habits 

Lenders now use bank-statement tracking tools to scan your last 3–6 months of spending.

They look for things like:

Red Flag  Why It’s a Problem 
Afterpay / ZipPay / Buy Now Pay Later  Shows reliance on micro-credit 
Gambling transactions  Instant high-risk category 
Dishonours or overdrawn accounts  Signals poor money management 
High Uber Eats / subscriptions / lifestyle blowouts  Suggests instability 

You don’t just have to earn enough — you have to spend responsibly.

 

3. Your “Stability Score” 

Lenders want safe, consistent borrowers. 

So they check for signs of stability, such as:

  • How long you’ve been in your current job
  • How long you’ve lived at your current address
  • Consistency in income and expenses

Too many changes (job-hopping, moving frequently, income fluctuations) can make lenders nervous — even if your income is high. 

 

Before You Apply — Do a “Pre-Check” on Yourself 

Most people apply blindly… and only discover their issues after a rejection.

At Credit Repair Australia, we review your credit file, analyse your bank statements, and flag anything that could get you declined — before you apply.