Simple, straightforward steps to raise your credit rating

Knowing the 'score' on your credit rating will make it a lot more likely for you to get that home loan. And improving your credit rating is a whole lot easier than you think...

The whole home-buying process is not for the faint-hearted. With your finances — and your character! — under scrutiny, it can feel a lot like you're on trial. But if you're well-prepared, getting a home loan shouldn't be any more nerve-wracking than choosing a new couch.

Would-be borrowers who want to be sure of a good credit score should do the following:

• Always use exactly the same name and surname combination for credit applications and credit cards, so that there can be no confusion about which credit lines belong to you, or any misunderstanding about how much credit you currently enjoy.

• Don't run joint accounts with your partner or spouse. One person's credit problems can haunt another's credit rating for years, even if those problems were created before they had a joint account. And, in the case of divorce, any existing joint account/s should be terminated immediately.

• Ensure that you have a good credit management record. It doesn't just take an insolvency or a bad-debt judgment to set alarm bells ringing. Other triggers are late or irregular debt repayments, overdrafts that are at their limit, maxed-out credit cards, too many recent applications for credit, and even a tax lien* on your salary.

• Be prepared to prove that you can afford the repayments on the loan you are applying for. Most lenders will look for at least a two-year track record of stability in a job or your own business, as well as verifiable proof of a steady income.

• Save for a deposit. Lenders are more comfortable with buyers who are prepared to invest in their own properties, and will usually grant home loan approvals more quickly — and at better interest rates.

When it comes to credit, prevention is always better than cure. Keep track of your finances, don't be tempted to go into debt for luxuries that have no asset value — the 'bling' and the 'bells and whistles' — and keep an independent record of your finances. Simple enough? Raise high that rating!

[*A lien is the right to keep possession of property belonging to another person until a debt owed by that person is paid off.]