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PROPERTY TALK
For the Buyer
As a property buyer one tends to be hesitant to apply for credit , but the reality is that most people cannot afford to buy a property cash and require financial assistance to fund the purchase of their property .
Understanding Credit
A credit application is easier than one thinks , despite the tightening of the Credit Act and various requirements put in place to ensure you do not become over indebted and run into financial trouble down the line .
Credit works on a scoring system which feeds off of two traditional platforms in South Africa ; namely Transunion and Experian . Banks use the very same platforms and generate a scoring system of their own which are generally significantly influenced by these two Credit platforms . Scoring works on a negative score ; meaning that everyone starts with the highest possible points which have points deducted on every negative activity . The Credit Platforms work on a scoring system from 001 to 999 and banks simplify it from 1 to 9 . The higher the number the better your account behavior and greater your score .
Top Score
There are certain things that one can do to generate a high score and even correct a bad score . Here are some guidelines on how to do that :
- Open an account : It seems contradictory , but if you open a clothing account or have some form of continuous account you develop a score based on the type of payment behavior you maintain .
- Don ’ t apply for credit : when you intend to buy a house ; its normally a planned event . It is recommended that you do not apply for credit of a large value ( ie . Buy a car , boat , or large personal loan ). The moment that a company performs a credit check on your profile ; the Credit platforms automatically reduce your score for a temporary period — normally a month or two .
- Don ’ t Default : Ensure that all your accounts are paid up to date and that you have not reversed any Debit Orders . Missed or Late Payments will be seen as a negative activity and your score will be reduced — even if it is an error of some kind .
- Correcting Credit : Minor things like Missed Payments generally return to normal scoring between 3-6 months ; however being Blacklisted or having long outstanding debts ( behind on payments ) have longer reach and consequences .
Handy Tips
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Know your budget and do your best to stay in budget .
Try and put aside a savings portion every month in a separate account — no matter how small
I order to qualify for credit you will need to have some form of credit or accounts depicting your spending habits .
Open a Cheque Account — Banks see this as a requirement to qualify for credit
For more advice on property options and the due process of buying ,
selling and investing …
Marc van Heerden Cell : 073 198 9369 Tel : 041 360 0365 marcv @ sothebysrealtype . co . za www . sothebysrealty . co . za Each office is independently owned and operated
� Plan , Plan , Plan !
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