Character

Why trust matters more than you think

When people hear the word Character, they often think the bank is judging them as a person.

It isn't.

The bank isn't asking whether you're honest, kind or hardworking.

It's asking a much simpler question.

"Based on everything we can see today, how likely is this person to repay the loan as agreed?"

In other words, the bank is looking for evidence that you're financially reliable.

Character is really about one thing:

Predictability.

The more predictable your financial behaviour has been over time, the lower the bank's risk.

And lower risk usually means more lending options.

How do banks assess your Character?

Banks build a picture using lots of different pieces of information.

No single item usually determines the outcome.

Instead, they're looking at the whole story.

Let's look at the main areas.

Employment History

One of the first things a lender looks at is your employment.

They're asking:

• Have you been working consistently?
• How long have you been in your current job?
• Is your income stable?
• Is there a clear employment history?

This doesn't mean you need to have worked for the same employer for twenty years.

People change jobs.

People change careers.

Life happens.

What matters is that your employment history makes sense and demonstrates stability.

Generally speaking, the longer you've been in your current role, the easier your application becomes.

Address History

Believe it or not, banks also look at where you've lived.

Again, they're looking for stability.

If you've moved six times in two years, they may ask why.

There could be a perfectly reasonable explanation.

University.

Rent increases.

Relationship changes.

Work.

The address history simply helps build a picture of your circumstances.

Your Credit Report

Your credit report is one of the most important documents in your application.

Many people think it only contains a credit score.

It doesn't.

It contains a lot more information.

Let's break it down.

Credit Enquiries

Every time you apply for credit, an enquiry is recorded.

That includes things like:

• Home loans
• Credit cards
• Personal loans
• Car loans
• Buy Now Pay Later accounts

One or two enquiries aren't a problem.

Lots of enquiries in a short period can suggest someone is urgently seeking credit.

Banks naturally ask questions when they see that.

Credit Accounts

Your report also shows what credit facilities currently exist.

For example:

• Credit cards
• Personal loans
• Car loans
• Existing home loans

Even unused credit cards matter because they represent money you could borrow tomorrow.

That's why reducing unnecessary credit limits can sometimes improve your borrowing capacity.

Repayment History

Thanks to Comprehensive Credit Reporting, lenders can often see whether you've made your repayments on time.

This is incredibly valuable.

Consistently paying your commitments demonstrates reliability.

Late repayments do the opposite.

If you're trying to improve your position before buying your first home, this is one of the most important habits you can develop.

Every repayment matters.

Defaults

A default means a debt hasn't been paid.

Defaults don't necessarily mean buying a home is impossible.

But they do raise questions.

Sometimes they're genuine.

Sometimes they're mistakes.

Sometimes they've already been paid.

The important thing is understanding what's there before you apply.

Court Judgments and Bankruptcy

These are less common but are also recorded.

They can significantly affect borrowing options.

Again, different lenders assess these situations differently.

Spending Habits

Contrary to popular belief, banks don't only look at income.

They also look at how you manage your money.

Things they may notice include:

• Frequent gambling transactions
• Large cash withdrawals
• Missed repayments
• Heavy reliance on Buy Now Pay Later
• Persistent overdrawing of accounts

This doesn't mean you need to live a perfect financial life.

It simply means your recent banking history should reflect responsible money management.

Social Media?

People often ask whether banks check Facebook or Instagram.

Generally speaking, no.

Lenders make decisions based on the financial information you provide and the documents supporting your application.

The stories you sometimes hear online about banks rejecting people because of holiday photos are largely myths.

Can you improve your Character?

Absolutely.

Character is probably the easiest of the five Cs to improve because many of the changes are completely within your control.

For example:

• Pay every repayment on time.
• Reduce unnecessary credit cards.
• Avoid making multiple credit applications.
• Close Buy Now Pay Later accounts you no longer use.
• Check your credit report for mistakes.
• Stay in your current job if you're planning to buy soon.
• Build a consistent savings habit.

Small improvements made over several months can significantly strengthen your application.

Don't panic if your Character isn't perfect.

Almost nobody has a perfect credit profile.

Life happens.

People change jobs.

They move house.

Relationships end.

Mistakes get made.

The important thing is understanding where you stand before applying.

Sometimes the answer isn't,

"No."

It's simply,

"Let's improve a few things first."

That's a much better conversation to have before submitting an application than after it's been declined.

How a Perch Broker Can Help

Understanding how lenders assess your Character is a great start.

The next step is understanding your Character.

When you become a Perch client, we'll complete a comprehensive Character assessment before recommending a lender.

We'll review:

• Your employment history
• Your address history
• Your credit report
• Existing debts and credit facilities
• Buy Now Pay Later accounts
• Credit enquiries
• Repayment history
• Any issues that could affect your application

If we identify something that could reduce your chances of approval, we'll tell you honestly.

More importantly, we'll explain exactly what needs to change and work with you to create a clear plan.

Sometimes the answer is "yes."

Sometimes it's "not yet."

Either way, you'll leave understanding exactly where you stand.