We have all seen that it is a very common scene for banks to decline an application for a home loan. In this article I will explain ways to increase one’s chances for getting that much needed loan.

In South Africa we have seen a shocking success rate of 40% for all people applying for home loans from the bank. And in some cases even worst figures can be seen. This situation has caused big concerns, because banks want to increase the production level of loans, but why are there so many declines in the industry? They say that the industry could have been almost double if it wasn't for the all the declines from the banks towards the people applying for home loans.

Due to recent surveys and studies, it has shown that without a doubt the biggest reason for this is simple. South Africans have a big lack in credit scores. Credit scores is used to describe how you treat your creditors and these are some of the factors that will have an impact upon your credit score.

1) Do you manage to pay of all your accounts and debts on time?

2) How long have you been paying debts? The longer you have been paying the better your credit score will be.

3) What percentage of your income goes towards your debts?

4) A credit score 660 or above will be considered as good credit.

5) If you have a credit score in this region then you will get your loan easier.

6) If your credit score is below 620 then you will be considered as a risk towards the creditors.

It is important to know that you cannot hide any financial figures or statuses nowadays. Everything you do is listed in a big electronic database which is shared between companies. Even small credit account will have an impact on your credit rating.

All South Africans can obtain a free flash card every year of their credit score. This should give you a good idea of where you stand on the credit ladder. And that you can see where you need to work on to achieve a better credit rating.

Next I will give a few tips on how get a clean credit score.

1) Pay all of your debts on time. It will improve your credit history.

2) Should you owe companies money, then it won’t always lower your credit score, but it will show companies that you might be a risk to them and you won’t be granted any further credit from them.

3) Try to avoid going on the max limit of all your credit accounts.

4) One should also try not to get a lot of accounts in a small amount of time. Creditors will see you as a high risk.

5) By undergoing debt consolidation in order to fix your current debt will increase your credit over time.

6) It is of utmost importance to not ignore any legal letters from companies. Act on them immediately.

We have seen that many unsuccessful mortgage applicants blame it on the NCA or the banks, but in fact they can only blame them self. One of the main reasons South Africa has survived the international banking crisis is because of the strict credit regulations.

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