There’s no such thing as blacklisted home loans – fix your credit
Every year there are hundred of South Africans who consider buying a new home, but they are not sure if they have the credit to make such a major purchase. This is a very realistic consideration. According to some statistics, at least twenty-five percent of South Africans are on the credit blacklist. This means that their chances of getting any kind of credit for even small loans are pretty much nil. What can you do if you find yourself on the blacklist. Well, getting off the bad credit list is not a quick process but the basics are very easy. Here are some things you can do.
First, you have to start right now. Credit worthiness is all about how much risk you are to lend money to. You establish good credit by making payments to your creditors on a regular timely basis. You cannot establish trust overnight. You have to show that you can be trusted to pay back the money that you have borrowed, and that you will make your payments on time. Your credit rating is basically a score that tells potential lenders how well good you are at paying and how timely you are.
Stop making unnecessary purchases and start making good regular payments on your bills. Even if you can't make the full amount right now, you should send something. Not receiving anything from you at all makes you look very bad to your lender. Companies understand that we all get into hard times and they know that sometimes people bite off more than they can chew. If you show that you are at least willing to tackle the debt that has piled up on you, you will make a much better impression on creditors than just letting things sit. Creditor B does not care that you want to finish off paying Creditor A first. Creditor A is not his problem. Creditor B wants to see at least something coming in from you. And these things show up in your credit report.
Get organized. Often you will find that your score has dropped even if you have been making the required minimum on all your accounts. Except if you stop and think about it, you were a week late here and a month late there. If you can't be bothered to get the money to your creditor on time, he will file a negative mark against you in your credit report. Plan a day to pay bills and stick to it. Or have a fixed routine that when a bill arrives in the mail, you sit down and write a check right then and there and put it in the mail. Whatever you have to do get yourself back to on-time payments will be a big step in turning that bad credit score around.
Finally, be aware of what kinds of information can affect your score. A lot of people don't realize that they're automobile insurance reports to the credit agencies. If you are lax on your payments or you let the insurance expire, this is reported. Also, whether you have a checking or savings account is reported by your bank to the credit agencies. Having a checking account in good standing at a bank is a great way to keep your credit score higher. A checking account establishes a certain degree of stability that reduces your risk factor. Another account that can establish stability for you is your utilities accounts, which often report to the credit agencies. If you have been paying your light bill consistently on time, that will usually be a positive mark on your credit report. The reverse is true as well, of course.
Work out your strategy of how you can turn your habits around in order to improve your credit score. It takes time, but establishing good habits allows you to hack away at the problem without thinking about it too much. Before you know it, you can be looking at a positive rating with banks begging you to borrow money from them to buy the home of your dreams. Banks want to lend money. That's how them make their profits. But you have to show them that you are a good risk. Start now.