However, getting approved with bad credit isn’t about finding a lender who ignores the rules—it’s about presenting your application in the best possible light. In New Zealand, lenders look at more than just your credit score; they look at your behavior.
Here are 12 practical, actionable ways to improve your chances of approval, based on how NZ lenders actually assess affordability.
Phase 1: Clean Up Your Application (The “Hygiene” Check)
Before you click “Apply Now,” you need to tidy up your financial footprint. Lenders will look at your last 90 days of bank statements. Here is what they want to see:
1. Stop the “Red Flag” Spending
Lenders use automated systems to scan for high-risk keywords. Avoid these transactions for at least 3 months before applying:
- Gambling: TAB, Lotto, or online casinos.
- Payday Advances: Frequent use of “wage advance” apps suggests you run out of money before payday.
- Excessive Fast Food/Alcohol: If 30% of your income goes to Uber Eats or liquor stores, it lowers your “affordability” score.
2. Know Your Exact Credit Score
Don’t guess. You can get a free copy of your credit report from Centrix, Illion, or Equifax. Sometimes, there are errors (like a bill you paid that is still marked as outstanding). Fixing these errors can boost your score instantly.
3. Prove Stable Income
Lenders love stability. If you just started a new job last week, you might be declined. Ideally, wait until you have passed your 90-day trial period or can show 3 months of consistent income.
Phase 2: Strategy During the Application
How you apply is just as important as what you earn. Use these strategies to look like a lower-risk borrower.
4. Be Realistic with the Amount
Don’t ask for $5,000 if you only need $1,000. Lenders calculate your “serviceability.” Asking for a smaller amount increases the likelihood that your surplus income can cover the repayments.
5. Offer Security (Collateral)
Unsecured loans are risky for lenders. If you have a car (even an older one) that is debt-free, offering it as security can significantly improve your approval odds, even with bad credit.
6. Consider a Joint Application
If your partner has a better credit history or income, applying together can strengthen the application. It shows the lender there are two incomes available to service the debt.
7. Don’t “Shotgun” Apply
This is a common mistake. Every time you make a formal application, it leaves a “footprint” on your credit file. If a lender sees you applied to 5 different places in one day, you look desperate. Choose one realistic lender and apply there first.
Phase 3: Honesty & Communication
8. Explain the “Why”
Many NZ lenders allow you to add notes to your application. Use this! If you missed a payment two years ago because you were in the hospital or lost a job due to COVID, explain it. Context matters.
9. Declare ALL Debts
Do not try to hide a debt. Lenders will see it on your credit report or bank statements anyway. Hiding it makes you look dishonest, which is an automatic decline. Be upfront about what you owe.
10. Show Savings (Even Small Amounts)
If you can show even $20 a week going into a savings account, it proves you have discipline. It is a massive green flag for lenders.
What to Avoid at All Costs
11. Avoid “Guaranteed Approval” Scams
If a lender promises approval without looking at your bank statements, run. These are often predatory loan sharks. Stick to registered financial service providers.
12. Don’t Borrow to Pay Debt (Unless Consolidating)
Taking a high-interest short-term loan to pay off another high-interest loan is a debt trap. If you are drowning in debt, consider a safe debt consolidation loan instead, which combines debts into one manageable payment.
Final Thoughts: Preparation is Key
Bad credit doesn’t mean “no.” It just means “not yet” or “not with that bank.” By cleaning up your bank statements, being realistic about what you can afford, and choosing the right lender, you can turn a “No” into a “Yes.”
Ready to explore your options? Check our guide on safe alternatives to no credit check loans to find lenders who look at the bigger picture.
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