The worldwide conditions in Finance have changed in the past few months

Major reasons contributing to this are: USA downturn in the housing market which has caused massive losses in some of the world's major banks and private equity firms, massive losses on the world share markets, talks of a possible recession in the USA and the recent rogue trader who lost almost $8billion from one of France's largest banks.

These factors are leading lenders to tightening their lending criteria as to avoid future loans becoming problems down the track. Its all part of risk management in these uncertain world economic times. Although Australia's economy is booming, we still rely heavily on the European and US markets, so it will only be a matter of time that their problems are felt here. Our rates have risen over the past 12 months due to inflation being above the RBA's target band of 2-3%, which has also put pressures on families and individuals wanting to borrow funds.

When looking at applying for finance in these times, it is very important to consider the following. Work out a budget in terms of how much you want to put aside for finance repayments. This can be weekly or monthly. Also work out how much the running costs will be for the new purchase. Its very important to consider these cost's as the lenders always take into account the running cost's of any new finance application and it varies on the size of engine of the car being purchased.

Its also very important to consider your financial background. No outstanding defaults or currently in bankruptcy will be accepted. The lenders will always look into your past credit history, so paying bills on time, and paying back Loans on time is so important. If your history with one lender has been excellent, another lender will have no hesitation in providing more finance.

Other important factors are your work and residential history. Most lenders require you to be full time or at least work full time hours and show some stability in your residential status.

In summary, your credit history allows you to do many things in life that you would not normally be able to. By this I mean, Borrow; to buy that dream car of yours, or go on that long awaited holiday, get married, buy the toy you have always wanted (Boat, Caravan, Motorbike), the list is endless. In these turbulent financial times, it's important to protect your file, look after your relationships with lenders and budget well so you can repay your debts .