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Settled Scenarios
LOW CREDIT SCORE

Consolidating seven loans on a low credit score

Seven loans consolidated for a borrower with a low credit score, all repayments current, after the file had been declined elsewhere.

$508k

LOAN AMOUNT

7 Loans

CONSOLIDATED

$525

MONTHLY REDUCTION

THE STORY

The file, in three parts

What the broker brought, how the credit analyst read it, and what settled

01 · The challenge

A borrower carrying seven separate loans and a low credit score approached a broker to consolidate. Every one of the seven was current, with no arrears anywhere on the file. Despite that, the application had already been declined by four lenders, on the grounds of total debt load and servicing. The position was becoming stressful for the client, who was meeting all obligations and still finding no way to simplify them.

02 · How VMG assessed it

Human underwriting does not use credit scoring, so the score that had been driving the outcome elsewhere was not the starting point here. Credit assessed the conduct instead: seven facilities, all current, which is evidence of capacity rather than the reverse. The purpose was straightforward, consolidating existing debt rather than adding to it, and the question was simply whether the single resulting repayment was serviceable and whether it left the borrower better placed than the arrangement it replaced. Indicative approval was issued the same day the file was assessed.

03 · The outcome

VMG settled a $508,000 consolidation across all seven loans, reducing the borrower’s monthly repayments by $525 and replacing seven commitments with one manageable structure.

THE TURNAROUND

Before and after

The same file, before the refinance and at settlement.

BEFORE VMG

Seven separate loans running simultaneously
Low credit score despite every facility being current
Four declines already on the file
No arrears anywhere in the repayment history

AFTER SETTLEMENT

All seven facilities consolidated into one loan
Monthly repayments reduced by $525
Indicative approval issued the same day
Assessment based on conduct rather than a score

💡THE VMG COMMON-SENSE ADVANTAGE

A low score and a clean repayment history can sit on the same file. Only one of those two things tells you how the borrower actually behaves.

HOW IT WAS ASSESSED

Human underwriting

Every file is read by a credit analyst, not scored by a system. There is no credit scoring, and no DTI or DSR ratio applied. The product and the terms depend on the individual file, so talk to your BDM about where a similar scenario fits.

Have a similar file?

Test the scenario with VMG credit before you lodge. VMG lends only through accredited mortgage brokers.

Test a scenario

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QUESTIONS

Frequently asked questions

No. Files are assessed under human underwriting, which means a credit analyst reads the file rather than a system scoring it. A low score does not itself decide the outcome. What the analyst is looking for is repayment conduct, the reason behind any adverse entries, and whether the structure being proposed leaves the borrower better placed.
Yes. A previous decline is not a mark against the file here, and credit will assess it on its own merits. It is worth telling your BDM what the earlier reasons were, because it usually points to which part of the file needs the most supporting evidence.
The test is the resulting position. Credit will look at whether the single repayment is serviceable, whether the security supports the borrowing, and whether the borrower is genuinely better off afterwards rather than simply refinanced. A clean repayment record across the facilities being consolidated is one of the strongest things a file of this type can carry.

All applications are subject to Victorian Mortgage Group’s standard credit assessment and lending criteria. Terms, conditions, costs and charges apply. This article is general information only and does not take into account your objectives, financial situation or needs.

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