How your credit status influences your home loan
If your credit status is bad, you won’t get a home loan approved…
If you are in the market for a new home, you a more than likely going to have to approach a bank and apply for finance as not many of us today can afford to buy a house with cash.
It is always best to shop around as the offers will differ from bank to bank. A small interest saving could add up to a lot of money over the term of the bond.
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If you are indeed looking to buy a home for yourself, a good credit score is crucial to getting your bond approved, this includes any future credit applications.
Your credit rating is attached to your credit record, this is a very important piece of financial information about you, it is a record of your credit history, the money you have borrowed and whether you have paid the money back and if you have paid the money back on time.
If you are to apply for a home loan from any bank or financial institution, they will check this record to see if there are any irregularities in your credit history.
A good credit history of consistent payment of debts on time will increase your chance of getting a bond approval as this indicates to the bank or financial institution that you re responsible with your money. It will also, generally allow you to negotiate a better interest rate.
Where to get your credit report?
With mycreditstatus.co.za you can get your credit score within 60 seconds. It’s as simple as signing up and verifying your identity.
Ways to ensure that you don't get rejected
- Always pay your bills on time, any late or skipped payments will have an adverse effect on your credit score
- Only apply for credit or loans as needed ensure that you can afford to meet the monthly financial obligations. The more you apply for credit or finance from various institutions, the more of a footprint left on your credit record, and the financial institutions will be able to see how frequently you have applied for credit in the past.
- Make sure you don’t have any judgements or listings – this will immediately get you rejected by any bank.
- Make sure you are not under debt review.
Keeping a clear credit record will be beneficial in the long run. Knowing that you have managed your finances properly at all times means that whenever you do apply for a loan, vehicle finance and in particular, a home loan, the financial institution will look favorably on your application.
DID YOU KNOW...
Did you know that the process of buying a house involves lots of legal contracts? Make sure you are empowered with world-class legal advice to save you from any fine print disasters that might harm you.