Before buying your first home, check your credit score
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Did you know that having the the right credit score is the first step towards securing the funds to buy your first home. Picture: Freepik
Durban - Did you know that having the the right credit score is the first step towards securing the funds to buy your first home.
Your credit score could affect your credit approval, the principal amount you qualify for and the interest rate on your mortgage.
In South Africa, the score range is 0-999, where 0 is the worst and 999 is the best.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa said, “For the best chance of a home loan approval with the best possible interest rate, you want your credit score to be somewhere between 614 - 999”.
People can check their credit score with a credit bureau or check their status using a banking app.
Here’s a look at some factors that could affect your credit score:
- People who are in debt but paying it back on time show that they are reliable and capable of paying back debt, which can increase their credit score.
- Being blacklisted by a creditor will leave a long-lasting stain on a credit record that’s difficult to remove.
- Not making payments or late payment – even if you make the payment up the next month – will count against a person’s credit score.
- Making too many credit applications or enquiries in a short period of time could also negatively impact a person’s credit score. If your application was rejected, try to wait at least a month before going to another financial institution.
Most places allow people to check their score once a month for free and checking credit score is considered a soft inquiry so it won’t affect a person’s credit.
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