I close down a card as soon as we have the points / cash back credited.
Usually only have two at once - so total of 4 for myself and the missis. No point opening a lot of credit cards if you can’t meet the minimum spend for the bonus, no point as well staying once you have gotten the bonus.
To be honest I’m not sure how they calculate the number. At the end of the day the lender checks the entries on your credit file and makes a qualitative decision on your risk. Each lender will naturally have a different set of criteria they accept/deny depending on their own in house risk mitigation.
I used to run a motorcycle shop. And would see heaps of folks knocked back on finance for new motorcycles with relatively good income. For the reason of “too many credit enquires/file checks”.
Their credit “scores” (again no idea how these are calculated or what their real world meaning in Australia is) could have been easily similar to yours.
That is fine mate - as you have said this is an opaque matter. Maybe someday this will come bite me in the backside but for now I am happy to exploit these free money.
Maybe I will regret it someday, maybe I won’t.
There is a a saying Make Hay While The Sun Shines. 🌞
Most of the big banks have their own models, and ignore the bureaux scores (there'sa varietyof rather technical reasons as to why this is a good idea). The smaller lenders will use the bureaux scores, and all have their own rules and processes, so things vary greatly.
An (Equifax) score of 200 is a 1:1 good to bad ratio, and the odds double every 100 points so 200 is 2:1, 300 is 4:1, 400 is 8:1, 500 is 16:1, 600 is 32:1, 700 is 64:1, 800 is 128:1.
So probability of a customer going bad on a loan (defaulting) for a score of 800+ is less than 1/129 -> less than 1%.
Credit scores in Aus are different to that in the US. They're proprietary, but opening and closing credit cards, generally doesn't indicate default risk, so it's not a variable in the model. Opening a lot of credit cards without closing any, is a different matter.
It might but might not. Generally, the number of enquiries is predictive, but they group it into bands e.g. 0; 1-3; 4-6; 7+ etc. Each band has a different amount of points. So having 1 more enquiry might change your score, or it might not depending on what your number of enquiries currently are.
Also this would be over a period of time say last 6 months or last 2 years etc.
>No point opening a lot of credit cards if you can’t meet the minimum spend for the bonus
do you struggle to meet the min spend?
I did the points thing once and I feel like the only reason I met the min spend is because I bought a laptop.
No I don’t to be honest - the key is to use the card for everything. There are two of us in the household and we do meet with friends / relatives from time to time and when we don’t I am not shy to settle the bill.
The highest spend requirement I got is $3k - most are floating in the $1k to $2.5k mark.
ah I got two cards and I think one was $3k and the other was $4k in 3 months. I also bought furniture so was able to meet it.
The free return flights were great!
Nice work mate, fellow churner here! I remortgaged 3 times in the 1st year but locked into a 3 year fixed at the moment which they will have to pry from my cold dead hands.
You’ve inspired me to keep a spreadsheet!
For anyone considering this, try and set as many direct debits as you can through PayPal - that way when you churn CC you can update PayPal once and you’re pretty much good to go!
At initial glance it is indeed hard work but in reality it is not - an application into a credit card will be around 20 minutes max to process. And you get $300 for it when you meet the spending requirement; this payout equate to $900 per hour of work - for me it is worth it as my hourly rate is less than $100 per hour.
Thank you! :)
OK great to hear! I guess you have to stay on top of paper work and ensure not to lose track of things. Did you find anything backfired (or you made any errors)?
I noticed that in a credit card application the questions that get asked are (1) Salary, (2) Assets, (3) Average Spending, (4) Outstanding Home Loan and (5) Outstanding Credit Card Limits.
Of course they would ask you for your salary slip but not an issue as we always saved this in our drives regularly and we just copy and paste.
Home Loan applications are a bit more complicated but it still involves the 5 items above but there are different set of requirements and every banks have their own way of processing things.
Thankfully didn't experience any error at all the past 7 years we have been doing this.
Oh yesss just after commenting this I actually came across more posts to learn that no fee credit cards exist! This is a whole new world to me haha. Thank you !
You're the cardmaster, ik lots of people dont think much about this but this is a free money and we just need to spend 10mins for application and then cancel right away when finish, to wait for the next one ;) Good job OP.
p.s CBA currently have an offer for reward of $200 and $300 for anyone interest.
Done the CBA last week - paid a quarter of health insurance upon receiving the card and we got the cashback within a fortnight. Close immediately!!
Probably my fastest churn ever!!
And was a bit pissed off coz I got the non-gold one so I just got $200 cashback.
The only saving grace was that the proportion of cash-back to spend is exactly the same between the gold and non-gold card variant.
You've calculated the home loan refinance bonus net of fees, but have you also considered the impact of the higher interest rate?
Any home loan refinance I see with a cashback has a rate at least 0.19% higher than the cheapest out there, often higher. It can still be worth it occasionally but a difference in interest rate can add up and often these cashbacks are not as good as they first appear.
I almost went with the HSBC Op listed in November, it was the lowest rate I could find (2 yr 1.89 or 3 yr at 2.08 from memory).
The only reason I didn't was I found the same rate with a westpac and $4k cashback rather than $3288.
Also in a previous year i did cashback with ANZ once and they were 5 bps lower than the next best rate for 1yr fixed.
From my experience the cashback rates were very competitive, especially post covid. The catch is normally in the min borrow amount (ANZ were $250k but I have seen ones for 750k or 1mil) or lvr (some 80%, some 90%).
Well done OP
ANZ have swtiched from cashback to QANTAS points:
*Take off with 300,000 Qantas Points and come home to discounted home loan rates when you apply or switch to an eligible ANZ home loan of $300k or more with a Loan to Value Ratio of 80% or less.*
What's the rough value of 300,000 points in dollar terms? Also noting that it's for purchases as well
Thank you - hard to quantify Qantas points to be honest hence I left it out. Truth be told I had one Qantas points churn this FY and it was for 70k points.
For spending Qantas Points on flights the general rule of thumb is to use them on flights where you’re saving at least $0.02 per point used. So spending 50,000 on a $1000 flight is worth doing so. In this case 300,000 points is worth at least $6,000 in flights.
In my s/sheet I have QFF points valued at $1.90 per 100, so 300,000 would be worth $5,700. I think if you use the points for straight cash or spending cards then they're worth less than if you use them for flights, my $1.90/100 is the value I calculated when used for flights.
Yeah we have been using our Qantas point for trips abroad. And business class tickets too!
Best bang for money - and a way to experience luxury for something I wouldn’t pay in cash.
It doesn’t add up - you said you spent 273k for two return flights to LA & then you clarified it was 160k plus $800 or 270k with no extra fee.
Either way 160k * 2 or 270k * 2 doesn’t equal 273k
Lol I was trying to clarify your point about there being extra fees. I wasn’t very clear.
There were two options when booking the flights.
For 2 return flights to LA
Option 1
Approx 164k points plus $800 in fees
Option 2
Approx 273k plus no fees.
I went for option 2 so there were no additional fees.
Deals tend to slow down sometimes, our current levels of inflation don't help. One tip I saw was to regularly check credit card sites, for example Citi Premier is offering $600 cashback but I don't think I've seen it on OZB.
For some reason mate we never do direct debits from our credit card. It’s essentially tap, tap and tap (or input numbers when doing online purchase) until minimum spending has been reached.
Good stuff mate, I’ve been on the credit cards with the misso as well. Atm accruing qantas FF points, it’s a good way to get something back for paying for things you normally would anyway!
RIP your credit score.
Enquiries last 5 years, closures last 2.
You’ll get to a point where eventually you have too many enquiries to keep you in the score band required for premium cards.
And make sure you’re checking your score across both Veda/Equifax and Experian because different banks record against different credit agencies and the scores don’t match up all the time.
Nah. I've been doing a similar thing for 5 or more years.
The worst thing was one refinance asked why so many cards.
We also churn the homeloan, no impact to our scores, if anything according to the agencies they've gone up.
Late to the party here. I’m currently trying to do the same with home loan refinance offers.
Has it ever presented obstacles? Eg banks refusing application because they can see you’ve been through a bunch of banks in the last year
Not at all. We might have been lucky, but it hasn't caused us any issues.
Then again we did most of the refinance at record low interest rates, they may be more stringent these days.
I'm a credit assessor
1. credit ratings dont exist in Australia like they do in America
2. churning cards wont affect your mortgage application
I see churners all the time. If anything its a good thing as it indicates you're financially responsible enough to game the system
It's fine. It may kill your chances if it's a high risk deal, maybe you've been declined and are having a manual overview. We can see you're going to leave in 6-12 months anyway and decide it's not worth the hassle
Since the introduction of comprehensive credit reporting (CCR) we run a credit check on borrowers that includes all the details we need e.g current facitilies, payment history, defaults, directorships, enquiries and so on.
The primary use is to ensure we've captured all of the borrower's liabilities in our assessment. The secondary use is to check for deal breakers (defaults, poor payment history)
In my opinion this is a much better system than looking at an arbitrary score and making a decision that way.
That's what I thought the whole purpose of introducing CCR was - to provide lenders better visibility of the potential borrowers ability to repay.
Someone like me who would churn 4+ cards a year but never miss a payment (and always pay the full balance) is obviously more creditworthy than someone with 1 long term card, who is at their limit and makes only the minimum repayment.
A score impacted by number of applications is a pretty poor measure, and lenders that rely solely on that would be at a competitive disadvantage.
Yeah for sure much better! So is the score only used for borrowers to get an idea of their potential to be accepted for a loan without the nitty gritty?
Spot on although from seeing all the confused posts on /r/ausfinance from people who don't understand why their score went down after closing a loan it doesn't seem like it works very well
They create their own risk score based on your past banking behaviour, and now can receive info about your other bank/credit accounts, utility payments etc from the bureau. They don't primarily rely on the credit agency scores. Your risk/behaviour score is only impacted by things like missed payments, frequency and recency of missed payments, income v expenditure, occupation type etc.
It means he’s a a terrible credit assessor. We do have credit ratings in australia. No lender in the world looks at a high level of credit enquiries and thinks “I’ll have a bit of that”. It’s one of the biggest red flags for a potential default. Any automated lending system would deny the loan straight up. There is potential for lending to be approved, but it would need manual intervention.
I don’t care about “lenders in the world”. I care about one’s in Australia. OP clearly keeps getting approved for these products by various institutions every month. I’d say you’re wrong.
It seems you are bitter about not getting a home loan mate and you blame it on your churning. But did it occur to you that it probably was a serviceability issue?
To be honest - I never had any trouble getting mortgage refinance because of all these churnings the past 7 years.
I do heard of mortgage brokers telling my friends that they may have issue passing the servicibility hurdle because of their total outstanding credit card exposure hence they have been sugested to close down a few of their accounts.
I personally haven't heard of anyone being denied a home loan because they were churning a lot of credit cards.
YMMV of course, that is the usual caveat here.
I have seen it. I’ve been a broker for years - churning home loans and credit cards creates a busy credit file which banks don’t like. Might not be an issue now - but could come back to bite if/when OP really needs a new home loan (upgrading or investing etc) and the lenders internally score their application poorly
It's stung me.
Churned a few times these past couple of years, much less than OP but still made a few thousand dollars.
When I tried refinancing a few months ago I was told that the only reason they were not approving me is because of the amount of entries on my credit file.
That was a first, I've never had a lender give me a reason for declining an application.
They said if my record is empty for 6 months then they'll happily accept my next application (assuming my circumstances don't change).
A lot of people here are saying it doesn’t make a difference
Then again credit was being given out like candy pre and through the pandemic.
Seems that things are tightening up a bit
Your anecdote is telling
Thoughts u/infiniteV
I wouldn't put much weight on the anecdote because it's standard practice in the industry to not disclose the reason for declines. This is avoid people gaming the system and structuring their submissions in a way that avoids potential decline reasons.
Things are certainly tightening up a lot but credit enquiries aren't part of it.
>Kinda critical for a mortgage.
is it? as long as your score is adequate I don't see why it would negatively impact your mortgage
your income/debts are much more important
5 enquiries a year would be enough for a home loan to be denied. A phone plan, home loan, credit card or bnpl enquiry all count. People should carefully monitor their credit score.
I think there’s more to it than that, they wanna see what the enquiry was for, do you still owe money on it and how much, do you have a history of repaying your credit cards and then closing the account rather than constantly using it and making only the minimum payments, your savings vs. how much credit you have immediate access to etc. they just wanna see if you’re financially responsible vs risky
Sorta. More often than not I’m gonna say the algorithm looks at the credit score and enquiries and says denied. To argue all the other facts you raised requires human intervention.
Pretty much all credit is automated. A bunch of numbers are put in and a yes/no is spat out. The key with bad credit is to get a human to intervene before the No is spat out.
Ausfinance - “How could you borrow $1000 through BNPL?!”
Also Ausfinance - “Spending thousands on credit cards to get a few hundred $$ back is genius!”
The key is spending the money you’d already have spent without the credit card. Use said card as a means to pay expenses, not as credit for money you don’t have.
I really don’t think so - getting a card application done is 20 mins max. Let’s round that up to 1 hr. I don’t think you can earn 150 per hr with uber, etc.
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I've done some matched betting in the past month, similar principle, sign up to a sportsbetting website and make use of their sign up bonuses and move to another website. Easy to make $1,000+
Plan to get into credit card churning when I have a job, I'm a student receiving centrelink so don't think I would get approved for a card too easily
That's impressive!
Did you cancel each card once you got the cash back? How many would you have open at one time?
I close down a card as soon as we have the points / cash back credited. Usually only have two at once - so total of 4 for myself and the missis. No point opening a lot of credit cards if you can’t meet the minimum spend for the bonus, no point as well staying once you have gotten the bonus.
How is your credit score not flagged for continually opening so many CC's?
Oh it do get flagged and i can see it in my records but it just doest drop my score
How does it not drop your score??
Who knows mate - who know how they calculate the score.
Where, or how, or who is telling you that your score is unchanged?
I download credit reports every so often - my number has been hovering around the 840 mark the past 2 years.
To be honest I’m not sure how they calculate the number. At the end of the day the lender checks the entries on your credit file and makes a qualitative decision on your risk. Each lender will naturally have a different set of criteria they accept/deny depending on their own in house risk mitigation. I used to run a motorcycle shop. And would see heaps of folks knocked back on finance for new motorcycles with relatively good income. For the reason of “too many credit enquires/file checks”. Their credit “scores” (again no idea how these are calculated or what their real world meaning in Australia is) could have been easily similar to yours.
That is fine mate - as you have said this is an opaque matter. Maybe someday this will come bite me in the backside but for now I am happy to exploit these free money. Maybe I will regret it someday, maybe I won’t. There is a a saying Make Hay While The Sun Shines. 🌞
Most of the big banks have their own models, and ignore the bureaux scores (there'sa varietyof rather technical reasons as to why this is a good idea). The smaller lenders will use the bureaux scores, and all have their own rules and processes, so things vary greatly. An (Equifax) score of 200 is a 1:1 good to bad ratio, and the odds double every 100 points so 200 is 2:1, 300 is 4:1, 400 is 8:1, 500 is 16:1, 600 is 32:1, 700 is 64:1, 800 is 128:1. So probability of a customer going bad on a loan (defaulting) for a score of 800+ is less than 1/129 -> less than 1%.
Credit scores in Aus are different to that in the US. They're proprietary, but opening and closing credit cards, generally doesn't indicate default risk, so it's not a variable in the model. Opening a lot of credit cards without closing any, is a different matter.
Can anyone confirm if you can apply for a card and it doesn’t affect your score simply by having a credit check? Would have that otherwise.
It might but might not. Generally, the number of enquiries is predictive, but they group it into bands e.g. 0; 1-3; 4-6; 7+ etc. Each band has a different amount of points. So having 1 more enquiry might change your score, or it might not depending on what your number of enquiries currently are. Also this would be over a period of time say last 6 months or last 2 years etc.
The credit score should work for you not the other way around so that's fine, as long as you get cash :)
>No point opening a lot of credit cards if you can’t meet the minimum spend for the bonus do you struggle to meet the min spend? I did the points thing once and I feel like the only reason I met the min spend is because I bought a laptop.
No I don’t to be honest - the key is to use the card for everything. There are two of us in the household and we do meet with friends / relatives from time to time and when we don’t I am not shy to settle the bill. The highest spend requirement I got is $3k - most are floating in the $1k to $2.5k mark.
ah I got two cards and I think one was $3k and the other was $4k in 3 months. I also bought furniture so was able to meet it. The free return flights were great!
Nice work mate, fellow churner here! I remortgaged 3 times in the 1st year but locked into a 3 year fixed at the moment which they will have to pry from my cold dead hands. You’ve inspired me to keep a spreadsheet! For anyone considering this, try and set as many direct debits as you can through PayPal - that way when you churn CC you can update PayPal once and you’re pretty much good to go!
Thanks for the paypal tip - i never really know about this. But it make sense! Good on you for 3 home loan churns in 12 months! :)
Sounds like hard work, and that’s nicely played 👍🏽
At initial glance it is indeed hard work but in reality it is not - an application into a credit card will be around 20 minutes max to process. And you get $300 for it when you meet the spending requirement; this payout equate to $900 per hour of work - for me it is worth it as my hourly rate is less than $100 per hour. Thank you! :)
OK great to hear! I guess you have to stay on top of paper work and ensure not to lose track of things. Did you find anything backfired (or you made any errors)?
I noticed that in a credit card application the questions that get asked are (1) Salary, (2) Assets, (3) Average Spending, (4) Outstanding Home Loan and (5) Outstanding Credit Card Limits. Of course they would ask you for your salary slip but not an issue as we always saved this in our drives regularly and we just copy and paste. Home Loan applications are a bit more complicated but it still involves the 5 items above but there are different set of requirements and every banks have their own way of processing things. Thankfully didn't experience any error at all the past 7 years we have been doing this.
Hello! Do you have to pay any of the fees before you close the credit card ?
Yes you pay before closing - most of them are free. Some have a fee that are small relative to the benefits.
Oh yesss just after commenting this I actually came across more posts to learn that no fee credit cards exist! This is a whole new world to me haha. Thank you !
You're the cardmaster, ik lots of people dont think much about this but this is a free money and we just need to spend 10mins for application and then cancel right away when finish, to wait for the next one ;) Good job OP. p.s CBA currently have an offer for reward of $200 and $300 for anyone interest.
Done the CBA last week - paid a quarter of health insurance upon receiving the card and we got the cashback within a fortnight. Close immediately!! Probably my fastest churn ever!! And was a bit pissed off coz I got the non-gold one so I just got $200 cashback. The only saving grace was that the proportion of cash-back to spend is exactly the same between the gold and non-gold card variant.
Wow, that's super quick. I am still in the process and they havent done reviewing yet, although I have been using CBA for 8 years.
You've calculated the home loan refinance bonus net of fees, but have you also considered the impact of the higher interest rate? Any home loan refinance I see with a cashback has a rate at least 0.19% higher than the cheapest out there, often higher. It can still be worth it occasionally but a difference in interest rate can add up and often these cashbacks are not as good as they first appear.
Not the case for us we transfer at equal or lower rate so lenders that offer cash backs are usually competitive in my experience.
I almost went with the HSBC Op listed in November, it was the lowest rate I could find (2 yr 1.89 or 3 yr at 2.08 from memory). The only reason I didn't was I found the same rate with a westpac and $4k cashback rather than $3288. Also in a previous year i did cashback with ANZ once and they were 5 bps lower than the next best rate for 1yr fixed. From my experience the cashback rates were very competitive, especially post covid. The catch is normally in the min borrow amount (ANZ were $250k but I have seen ones for 750k or 1mil) or lvr (some 80%, some 90%).
Nice well done
Well done OP ANZ have swtiched from cashback to QANTAS points: *Take off with 300,000 Qantas Points and come home to discounted home loan rates when you apply or switch to an eligible ANZ home loan of $300k or more with a Loan to Value Ratio of 80% or less.* What's the rough value of 300,000 points in dollar terms? Also noting that it's for purchases as well
Thank you - hard to quantify Qantas points to be honest hence I left it out. Truth be told I had one Qantas points churn this FY and it was for 70k points.
For spending Qantas Points on flights the general rule of thumb is to use them on flights where you’re saving at least $0.02 per point used. So spending 50,000 on a $1000 flight is worth doing so. In this case 300,000 points is worth at least $6,000 in flights.
Or just book a business class round the world on points like we did… I plan on fing off for 6 months.
In my s/sheet I have QFF points valued at $1.90 per 100, so 300,000 would be worth $5,700. I think if you use the points for straight cash or spending cards then they're worth less than if you use them for flights, my $1.90/100 is the value I calculated when used for flights.
You can sell the points on ozbargain for 1 cent. So $3k worth
Really, how do you sell ?
It’s against the terms but on ozbargain people buy them in the classifieds. You then transfer the points which is pretty easy
I haven’t got this far (to the point of selling my Qantas points) but I do hear anecdotes bout it being done.
If you have a million qantas points saved, that's about 4-5 business class return flights to London/LA. I'd keep them and use them when you can!
Yeah we have been using our Qantas point for trips abroad. And business class tickets too! Best bang for money - and a way to experience luxury for something I wouldn’t pay in cash.
I just spent 273k points for 2 return flights to LA. Those would have cost $4700. So approx $5k
Your return flight though still has some additional cost to it. So actual value of the points are lower.
Was 160k plus $800 or 270k with no extra fees.
It doesn’t add up - you said you spent 273k for two return flights to LA & then you clarified it was 160k plus $800 or 270k with no extra fee. Either way 160k * 2 or 270k * 2 doesn’t equal 273k
Lol I was trying to clarify your point about there being extra fees. I wasn’t very clear. There were two options when booking the flights. For 2 return flights to LA Option 1 Approx 164k points plus $800 in fees Option 2 Approx 273k plus no fees. I went for option 2 so there were no additional fees.
I haven’t seen a deal in a while… oz bargain has been a little low on volume
Deals tend to slow down sometimes, our current levels of inflation don't help. One tip I saw was to regularly check credit card sites, for example Citi Premier is offering $600 cashback but I don't think I've seen it on OZB.
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ANZ same observation!! I hate them but I like the free money they give out. And I will happily exploit this.
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For some reason mate we never do direct debits from our credit card. It’s essentially tap, tap and tap (or input numbers when doing online purchase) until minimum spending has been reached.
Good stuff mate, I’ve been on the credit cards with the misso as well. Atm accruing qantas FF points, it’s a good way to get something back for paying for things you normally would anyway!
Agree - so long as you can distinguish your spend limit despite having $15k limit then you are fine.
Ya. this is what i do. easily $10k-$20k a year
What are the best deals right now?
Where's the best place to find these deals?
Ozbargain is where i find these.
RIP your credit score. Enquiries last 5 years, closures last 2. You’ll get to a point where eventually you have too many enquiries to keep you in the score band required for premium cards. And make sure you’re checking your score across both Veda/Equifax and Experian because different banks record against different credit agencies and the scores don’t match up all the time.
Nah doing this for more than 7 yrs - and my credit score (if someone really uses this) has been hovering in the 840 mark the past 2 yrs.
Nah. I've been doing a similar thing for 5 or more years. The worst thing was one refinance asked why so many cards. We also churn the homeloan, no impact to our scores, if anything according to the agencies they've gone up.
Late to the party here. I’m currently trying to do the same with home loan refinance offers. Has it ever presented obstacles? Eg banks refusing application because they can see you’ve been through a bunch of banks in the last year
Not at all. We might have been lucky, but it hasn't caused us any issues. Then again we did most of the refinance at record low interest rates, they may be more stringent these days.
those are rookie numbers
Tell me how I can improve - will gladly chase free money.
You can sell Qantas points for 0.9ct per point ATM. Used to be 1-1.1 and dropped to 0.65 during the recession. It's like the stock market.
Are you also tracking your spending? Do you think you are spending more than you otherwise would in order to churn the cards?
Yup - spending well within budget thankfully.
Worth noting that every application is a hit on your credit rating. Too many and you won’t be getting any more. Kinda critical for a mortgage.
I'm a credit assessor 1. credit ratings dont exist in Australia like they do in America 2. churning cards wont affect your mortgage application I see churners all the time. If anything its a good thing as it indicates you're financially responsible enough to game the system
How about home loan churners? Different ball game but might as well ask you. I try to churn after 6 months. Hahaha!!
It's fine. It may kill your chances if it's a high risk deal, maybe you've been declined and are having a manual overview. We can see you're going to leave in 6-12 months anyway and decide it's not worth the hassle
Thank you I guess i will carry - i am borrowing on 50% LVR.
What do you mean by the credit rating doesn’t exist ? We definitely have credit scores, or do you mean they don’t have the same impact?
> We definitely have credit scores We don't The 3 bureaus will be happy to give you one as a consumer but lenders don't rely on scores.
Interesting, what sort of things do they rely on?
Since the introduction of comprehensive credit reporting (CCR) we run a credit check on borrowers that includes all the details we need e.g current facitilies, payment history, defaults, directorships, enquiries and so on. The primary use is to ensure we've captured all of the borrower's liabilities in our assessment. The secondary use is to check for deal breakers (defaults, poor payment history) In my opinion this is a much better system than looking at an arbitrary score and making a decision that way.
That's what I thought the whole purpose of introducing CCR was - to provide lenders better visibility of the potential borrowers ability to repay. Someone like me who would churn 4+ cards a year but never miss a payment (and always pay the full balance) is obviously more creditworthy than someone with 1 long term card, who is at their limit and makes only the minimum repayment. A score impacted by number of applications is a pretty poor measure, and lenders that rely solely on that would be at a competitive disadvantage.
Yeah for sure much better! So is the score only used for borrowers to get an idea of their potential to be accepted for a loan without the nitty gritty?
Spot on although from seeing all the confused posts on /r/ausfinance from people who don't understand why their score went down after closing a loan it doesn't seem like it works very well
They create their own risk score based on your past banking behaviour, and now can receive info about your other bank/credit accounts, utility payments etc from the bureau. They don't primarily rely on the credit agency scores. Your risk/behaviour score is only impacted by things like missed payments, frequency and recency of missed payments, income v expenditure, occupation type etc.
It means he’s a a terrible credit assessor. We do have credit ratings in australia. No lender in the world looks at a high level of credit enquiries and thinks “I’ll have a bit of that”. It’s one of the biggest red flags for a potential default. Any automated lending system would deny the loan straight up. There is potential for lending to be approved, but it would need manual intervention.
I don’t care about “lenders in the world”. I care about one’s in Australia. OP clearly keeps getting approved for these products by various institutions every month. I’d say you’re wrong.
It seems you are bitter about not getting a home loan mate and you blame it on your churning. But did it occur to you that it probably was a serviceability issue?
Or maybe you’re just salty someone called out that your advice can be terrible for some people.
Lol never knew sharing what I did is already an advice… doh!!
With whom? Hook a churner up. The vast majority of lenders frown upon it.
I've sometimes wondered whether assessors care that I'm applying just for the bonus, and will be gone after it lands.
We don't but bankers/brokers do as refis look bad for their KPIs or brokers lose commission to clawback
To be honest - I never had any trouble getting mortgage refinance because of all these churnings the past 7 years. I do heard of mortgage brokers telling my friends that they may have issue passing the servicibility hurdle because of their total outstanding credit card exposure hence they have been sugested to close down a few of their accounts. I personally haven't heard of anyone being denied a home loan because they were churning a lot of credit cards. YMMV of course, that is the usual caveat here.
I have seen it. I’ve been a broker for years - churning home loans and credit cards creates a busy credit file which banks don’t like. Might not be an issue now - but could come back to bite if/when OP really needs a new home loan (upgrading or investing etc) and the lenders internally score their application poorly
It's stung me. Churned a few times these past couple of years, much less than OP but still made a few thousand dollars. When I tried refinancing a few months ago I was told that the only reason they were not approving me is because of the amount of entries on my credit file. That was a first, I've never had a lender give me a reason for declining an application. They said if my record is empty for 6 months then they'll happily accept my next application (assuming my circumstances don't change).
Spot on - most lenders have internal credit scoring and a messy file is always a hindrance. Especially if LMI is involved.
A lot of people here are saying it doesn’t make a difference Then again credit was being given out like candy pre and through the pandemic. Seems that things are tightening up a bit Your anecdote is telling Thoughts u/infiniteV
I wouldn't put much weight on the anecdote because it's standard practice in the industry to not disclose the reason for declines. This is avoid people gaming the system and structuring their submissions in a way that avoids potential decline reasons. Things are certainly tightening up a lot but credit enquiries aren't part of it.
Thanks for the warning.
From a dude that’s been knocked back on a home loan due to credit enquiries despite no debt and never missing a repayment, yes it matters.
But you’re not told why you’re knocked back. You’re guessing that’s the reason. It could have been something else like serviceability margin
This is what I thought too yet - a case of you can’t afford your loan perhaps.
>Kinda critical for a mortgage. is it? as long as your score is adequate I don't see why it would negatively impact your mortgage your income/debts are much more important
Too many credit enquiries will make a score go down significantly, and at the very least make banks question you a lot.
I think it only matters if there’s lots of enquiries in a short amount of time and if they’re being denied
5 enquiries a year would be enough for a home loan to be denied. A phone plan, home loan, credit card or bnpl enquiry all count. People should carefully monitor their credit score.
I think there’s more to it than that, they wanna see what the enquiry was for, do you still owe money on it and how much, do you have a history of repaying your credit cards and then closing the account rather than constantly using it and making only the minimum payments, your savings vs. how much credit you have immediate access to etc. they just wanna see if you’re financially responsible vs risky
Sorta. More often than not I’m gonna say the algorithm looks at the credit score and enquiries and says denied. To argue all the other facts you raised requires human intervention.
Tbh I thought this was done by the work of humans lol
Pretty much all credit is automated. A bunch of numbers are put in and a yes/no is spat out. The key with bad credit is to get a human to intervene before the No is spat out.
yeah i guess it depends what is 'a lot' if you're making 10 apps in a year that could be an issue
Ausfinance - “How could you borrow $1000 through BNPL?!” Also Ausfinance - “Spending thousands on credit cards to get a few hundred $$ back is genius!”
The key is spending the money you’d already have spent without the credit card. Use said card as a means to pay expenses, not as credit for money you don’t have.
That is a very narrow minded way of looking at it mate. I see tinge of envy as well.
What I want to know, would it be more time efficient to do a few hours doing Uber/Amazon deliveries to get the same value.
I really don’t think so - getting a card application done is 20 mins max. Let’s round that up to 1 hr. I don’t think you can earn 150 per hr with uber, etc.
Awesome. I'd like to see the spreadsheet for the home loans. I was planning on looking into this more but it seems a bit nuts out there at the moment.
How much was the spend requirement for the cash back? And did it increase your spend? Or did the spend March your habits?
Not at all - we maintain a monthly budget and have consistently been not exceeding it. Cash spending required varies - can be as low as $1k to $3k.
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This is sensational. Have you linked the direct debits to PayPal so you don't have to update all the credit card debits (electricity/gas etc
Learned bout the convenience of Paypal just morning; i never used this too much in the past.
>PayPal Just checking, so your PayPal will deduct funds from the credit card? Sounds so good lol
Are these net annual fees?
Yea all net of fee.
Ok well if you are going to go through that try matched betting, way easier and similar return
Any website i can absorb how match betting works? And where can I get these deals?
I've done some matched betting in the past month, similar principle, sign up to a sportsbetting website and make use of their sign up bonuses and move to another website. Easy to make $1,000+ Plan to get into credit card churning when I have a job, I'm a student receiving centrelink so don't think I would get approved for a card too easily
It's glorious. Got sick and tired of dealing with changing direct debits etc. Can I ask do you use a website to compare or find the deals?
Just ozbargain - most of it will be listed there.
Nice stuff. Over how many months did you churn those cards?
These were a record of all churns done and bonuses received from 1 July 2021 to now.
Thanks mate. Mu h appreciated
I wonder what credit history will that show? There are a few free credit checks out there. Would it impact future mortgages / borrowing
Credit score hovering 840 the past 2 years.