Repairing a bad credit score
RE/MAX give advice on ways to repair your credit score and to improve your chances of being approved for home finance.
After over two years of high interest rates, it is understandable that some might be dealing with a tarnished credit score. Thankfully, there are ways to repair your credit score and to improve your chances of being approved for home finance.
“A good credit score is important as it determines whether you will be approved for any kind of financing and also determines what interest rate you are offered. This is particularly important for those who are hoping to qualify for a home loan,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
Goslett’s first piece of advice is to regularly monitor your credit report to stay informed about your credit status. “This helps you catch any issues early and track your progress in improving your credit. Some banking apps allow you to check your credit score for free,” he notes.
If you discover that you have a low credit score, Goslett recommends that you start building a positive credit history by paying all your bills on time and in full. “Any missed, late, or partial payment will count against you, so you will need to find a way to keep up with every repayment if you want to improve your credit score.”
Having too much debt against your name will also affect your credit score. “Focus on paying off the high-interest debts first, but ensure you are making minimum payments on all accounts to avoid further negative marks on your credit report,” says Goslett.
If you are struggling to keep up with all your repayments, Goslett suggests that you contact your creditors to see if any are willing to negotiate repayment terms. Whatever is agreed to, ensure that it is documented in writing.
For those who are unable to make any progress on their own, Goslett recommends speaking to a debt counsellor who can help you manage and repay your debt. They can negotiate with creditors on your behalf and create a manageable repayment plan.
“Most economists predict that we will see our first interest rate cut of around 0.25% in September or November this year. For those who were planning to enter the property market when interest rates dropped, now is the time to start cleaning up your credit record to make sure you get a favourable rate on a home loan,” Goslett concludes.
Writer: Kayla Ferguson
