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Tips for Buying a Property

Credit tips to secure your bond

The National Credit Act was created to help protect consumers from getting themselves into position of unmanageable debt and to encourage credit providers to implement responsible lending practices. This Act means that credit bureaus and credit providers are now: closely regulated, required to be transparent and must ensure that their consumers fully understand the implications of entering into a credit agreement.

These stricter lending policies extend to the realm of home loans too. So when you apply for a home loan your credit history, amongst other things, will be taken into consideration. This makes having a healthy credit score (based on your ability to manage credit responsibly) and finding out what you do or don’t qualify for – even more important than ever before.

Find out where you stand

Oobaqualified will help you get an idea of the size of the home loan that you will qualify for. Not only will this give you an idea as to whether or not you can afford your dream home, but knowing your spending power puts you in a position of strength to negotiate for the best deal.

Tips to keep a healthy credit score

1. Ensure you meet your monthly debt repayments on time. Even a payment that is only 24 hours late can be bad for your rating.

2. If you fall behind on repayments, get back on track as soon as you can.

3. Always pay the minimum instalments required not less.

4. Close account that you don’t use. Credit providers’ asses the full facility of the credit agreements on record, even if they are not being used.

5. Draw up a budget. And stick to it.

6. Boost your buying power and reduce your debt. If possible, pay more than the minimum payment on your accounts to further improve your credit standing

7. If you can’t make a payment, talk to the relevant creditor about making an alternative payment plan.

8. Don’t ignore a letter of demand. Be proactive and take appropriate action.

The importance of a clean slate

To optimize your chance of securing your desired home loan, make sure you keep a clean credit record. Most retail stores and banks default listings will remain on a consumer’s credit profile for two years. If you do come unstuck, settle your account and then contact the relevant credit provider to check that your name and record has been cleared. Get written confirmation. If you have a judgement on your record, clear the account and then contact a litigation attorney to have the judgement withdrawn. TransUnion (ITC) and Experian are South Africa’s leading credit bureaus so check your status with both bodies as they have different ways of calculation your score.

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