A Fin24 user feels that wrong decisions in the past may
affect his home loan application. He writes:
I have a credit score of 611 because of wrong decisions made
in the past.
In the meantime, I got a job that pays above the average and
want to apply for a home loan. Would I qualify and what advice do you have?
Kay Geldenhuys, manager of property finance processing at
ooba, South Africa’s biggest bond originator, responds:
Banks require a clean credit record before they will
consider approving your home loan application.
The best thing that you can do is approach a credit
rehabilitation company like Lucid Clear Credit, who can advise you on what
steps you can take to improve your credit score.
Until your record is cleared, ensure that you don’t get into
any further financial difficulties. Make sure that you pay back any credit like
credit cards, store cards, car finance, and debts like doctors' bills on time
and in full.
While there are steps that can be taken to rehabilitate a
bad credit record, the best way to be financially healthy is to pay your bills
on time and in full. This is also good practice for repaying a home loan.
In the meantime, you say that you are now earning well.
You can further improve your future chances of securing a
home loan if you save up for a deposit.
As I have said before, banks will not
consider a home loan application if the applicant does not have a clean record,
but once yours is clean, a deposit will make the banks more likely to look
favourably upon your application.
Then, to further improve your chances of approval, use the
expertise of a bond originator to present your application in the best possible
light to multiple banks and obtain the best interest rate.
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