Your credit report paints a picture of your life as a responsible bill payer and borrower. Under the new Comprehensive Credit Reporting (CCR) regime introduced this year, it has increased in importance because lenders will be required to take it into consideration when approving your home loan. That’s why it’s a good idea to keep yours in good shape.

Last month, we explained the recent changes to credit reporting under CCR. In this article, we look at ways to clean up your credit report. First, a quick refresher.

What is a credit report and why is it important?

Credit bureaus compile credit reports based on feedback about your credit behaviour from banks and other credit providers. Your credit report contains a credit rating between zero and 1200 – an overall measure of your creditworthiness. If you’re applying for a loan, credit card, electricity or mobile phone contract, chances are a credit check will be undertaken.

From July 1, Comprehensive Credit Reporting (CCR) became mandatory for the big four banks. Under this system, it’s compulsory for banks to share both negative and positive details about your credit behaviour with other lenders.

How to download your credit report

Simply request a copy from a credit reporting body like Equifax, Dun and Bradstreet, Experian or the Tasmanian Collection Service. You can access your report for free once a year and it should arrive within 10 days.

Tips for keeping a clean credit report

Regularly review your credit report

Make a habit of checking your credit report at least once a year. Carefully comb through the details and check for any errors. Make sure your personal identification information and financial details are accurate. Be sure to check that any negative information such as bankruptcies have been removed from your credit report after the required amount of time.

Hot tip: Some credit bureaus offer subscription services that alert you to changes in your credit report. This could come in handy for protecting yourself against identity theft.

Report any errors

If you notice something’s amiss, it’s important to address the issue immediately. Contact the credit provider (bank, utility company or telco, for example) and ask that the matter be investigated. Also, file a dispute with the credit reporting agency about the error. If you are told the discrepancy will be rectified, be sure to follow up to make sure it’s been fixed.

Pay your bills on time

If you have a track record of late payments, credit providers may think you are under financial stress. Remember to pay your bills and credit cards by the due date. Setting up autopay or direct debit is a good way to stay on track. By paying bills on time, you’ll position yourself as a responsible borrower who is reliable when it comes to money matters.

Go easy on credit applications

Applying for multiple credit cards, loans or other forms of credit in a short timeframe can signal a red flag for future credit providers. Only apply for credit when it’s necessary, you’ve chosen your preferred provider and you are confident of being approved.

Talk with your mortgage broker

It’s important to understand your credit report, so that there are no nasty surprises when you apply for a home loan. Remember, taking the time to improve yours could make a world of difference to your loan application. If you need help understanding the report or would like advice about any credit-related matters, please talk with your mortgage broker. They may even be able to use your credit report to help secure a more competitive home loan.

There are many benefits to renovating your home. Renovations add value to your property, whilst also giving you the opportunity to improve your lifestyle. For those looking for more space, it may also be a more cost-effective option than buying a new place, considering the cost of agent’s fees and stamp duty.

If your current home no longer serves your needs, it may be a better idea to give your property a facelift than sell up and move. Here are some renovation ideas to future-proof your home. But first, why renovate?

Reasons to renovate

• To make the home more suitable to your family’s needs
• To increase the resale value
• To avoid the costs of selling, purchasing a new home and moving
• To restore an old home to its former glory
• To make your home eco-friendly
• To make it more attractive to future buyers.

Where you spend your money will depend largely on your motives for renovating. Here are some things it pays to consider when renovating your home to make it future-proof.

The kitchen
Updating the kitchen offers great bang for your buck in terms of your property’s resale value. According to Domain, spending $10,000 on a kitchen reno could improve your home’s value by as much as $50,000! It can also go a long way towards improving the long-term liveability of your home.

When planning the design, consider how your family’s needs may evolve over time. If you’re having more children, will you need a larger kitchen where everyone can gather? Would a breakfast bar be useful for informal dining? Perhaps energy-saving appliances are important to you in the long-run?

What’s hot right now?

• Contrasting materials like timber and tiling
• Statement splashbacks
• Contrasting colours (think dark benchtops against creamy walls)
• Smart storage options (deep drawers, roll-out trays and caddies for pots and pans)
• Tapware with a difference (motion sensors and matte-black finishes)
• Benchtops that incorporate dining tables into the design.

Bathroom
Renovating your bathroom allows you to improve functionality, increase storage space, address problems like mould and leaky fixtures, and enhance energy efficiency. Even simple enhancements can make your bathroom more durable for years to come and add value to your home. If you can add a second bathroom, even better.

What’s hot right now?

• Energy savers like instant gas hot water
• Statement mirrors (round and timber-framed mirrors recessed into the wall)
• Bold basins mounted on top of vanity benches
• Floating vanities that free up floor space
• Smart additions (sensor-activated toilets with self-cleaning capabilities, customisable showerheads, smart mirrors with in-built speakers and LED clocks)
• Oversized free-standing bathtubs
• Spa-inspired designs (heated towel rails and underfloor heating).

Living areas

When future-proofing your home, consider the communal living areas and how your needs might change in coming years. For example, you may like to renovate to include a second living room that could double as a toy room. This area could function as a study during the kids’ teenage years, then as a reading nook when you’re older.

Upgrading the flooring or repainting the walls in your living areas are relatively inexpensive enhancements that can add value. Choose durable flooring to suit your family’s long-term needs, and neutral tones that offer wide appeal. Limit the use of carpet as it wears quickly. Don’t forget to consider renovations that could maximise outdoor living areas.

What’s hot right now?

• Open-plan living areas
• Concrete flooring
• Indoor outdoor living (all-weather extensions)
• Recycled materials in landscape design (rusted metal sheets and reclaimed timber)
• Motorised pergolas and awnings operated via remote control
• Smart gardens (technology to water your gardens or turn your lights on via your phone).

We hope you’ve found these renovations to future-proof your home handy. If you’re feeling inspired to renovate, your mortgage broker can explain your finance options. For example, you may be able to refinance and unlock the equity in your home to pay for your renovations. Get your renovation dreams off the ground – get in touch with your local mortgage broker today.

Mention property investment and most people think of a conventional house or apartment. However, there are other types of property investment opportunities which may appeal to those with a little more imagination!

In this article, we share some out-of-the-box ideas you may not have considered. Remember, your mortgage broker can assist with finance for all different types of property investments, including those with a twist.

Car parking spaces
In capital cities such as Sydney and Melbourne, car parking spaces in the inner-city are often in high demand. That, coupled with limited supply, makes for an attractive investment opportunity.

The potential benefits of investing in a car parking space are that you can reap an attractive rental income, without incurring costs traditionally associated with residential investment properties.

Prices for car parking spaces vary. However, generally speaking, they tend to range from $40,000 to $130,000 in inner-city locations (sources: www.findacarpark.com.au and https://www.commercialrealestate.com.au).

To give you an idea of the returns, a lock-up garage parking space in Lonsdale St, Melbourne, could bring in $922 a month. Likewise, a secure car space on Clarence Street, Sydney, could rent for $1018 a month (source: www.spacer.com.au).

Tips

• Understand the potential costs involved in owning the space (for example council rates, strata fees and congestion levies)
• Find out whether any planned developments could affect your investment
• Make sure there are no restrictions about renting out the space before proceeding.

Converted or quirky properties
If you’re looking for an investment opportunity that’s outside the norm, how about a converted property, or one you could transform? As an example, check out this former fire station in Petersham, Sydney. It was converted into a private residence and is now set to become a beautiful boutique hotel.

Another example is this former brewery turned boxing gym, school, military drill hall, Masonic lodge, girl guides hall, antiques shop, and café in Campbell Town, TAS. It could be yours for $800,000 and has potential for a creative developer. On the other end of the price range is this former Masonic lodge in Woomelang, VIC, available for a mere $49,000.

If you’ve fallen in love with the tiny house craze, you may like to look for a smaller property. This former Anglican church, for example, offers plenty of charm in Kempsey NSW.

Tips

• If you’re converting commercial into residential, make sure there are no planning or zoning constraints
• Research the tenants and end-market you’re trying to attract – not all converted properties will offer wide appeal
• Be sure to factor the costs of converting the property into your budget.

Mixed-use properties|
Mixed-use properties are zoned for more than one purpose. Common examples include retail properties with apartments upstairs, converted warehouses with a residence, or freestanding houses with a shopfront.

As an investor, mixed-use properties can offer income streams from both residential and commercial tenants. They also help you diversify your investment portfolio, as you’re investing in two different markets simultaneously. If one market falters, you still have the other to fall back on.

Tips

• Consider your plans for the property and make sure it is zoned and fit for your purpose
•  Keep in mind you’ll require a commercial loan rather than a residential one, which may come with a higher interest rate and shorter loan term.

Talk to your broker about your plans today
If you have an idea for an unusual property investment, it’s important to talk to your mortgage broker early on. They’ll look at the numbers and help you decide which type of finance is right for you. Remember, your broker can offer advice on all types of loans for property investment, so please get in touch.