How to keep a good credit score
Your credit score can make or break your bond application because it's one of the most important things the banks look at when considering your home loan affordability. Make sure your credit rating is in good shape by applying a few simple rules in managing your money.
Build graduallyThe best way to have a good credit record is to build it up over time. In this case, having debt can be a good thing, provided you manage it well. Clothing or other retail store accounts, cellphone bills, car payments, personal loans... if you have been careful about paying on time and covering at least the minimum amount every month, it will have built your credit rating.
A credit card can be a force for good in your bond application if you use it with care and make sure you maintain regular monthly payments. In this instance it is not only about having the credit, but how you manage it tells the bank a lot about you and gives them an indication of how you could one day manage a home loan.
Pay on timeMinor arrears can have a major impact on your credit rating and therefore your bond application. Do not underestimate the influence of this small little detail on your eligibility for a home loan! The banks are extra cautious about lending to someone who has even the slightest arrears to their name when it comes to paying their monthly dues. Do not let this trip you up. Always pay your accounts and meet your financial commitments in full and on time, then you will have nothing to worry about when the time comes to apply for a home loan.
Know your scoreYou can view your Credit Score and access your Credit Report free of charge on the website My Credit Expert - www.mycreditexpert.co.za - where you can get a detailed breakdown of past and present accounts, use the dispute function to query or clarify your information, and get advice to help you improve your Credit Score and raise your Credit Rating if it needs a bit of work.
Remember that a good credit score is important for your overall financial well-being. It is always a good idea to keep an eye on it, and to maintain it to best of your ability. Then, when the time comes, you will be in a position to get the best bond to buy your dream home!