FINANCE|
BY: LOYISO NGAVU
Even though there is no such thing as a perfect credit score, having a decent credit score is one of the most valuable assets a person who is considering purchasing a home can have.
It is able to acquire a favorable mortgage and refinancing rate, and as a result, it can influence everything from the size of the loan repayment to the interest rate on the house loan. Moreover, it can help a person qualify for a lower interest rate.
Your credit score is a three-digit number that ranges from 0 to 999 and is determined by a credit agency based on your financial history. This number can be affected by a variety of factors, including the amount of debt you have as well as your income.
When you apply to the bank for a home loan, the bank will look at your credit score.
The likelihood of the bank granting you the loan is directly proportional to the quality of your credit score.
A credit score that is at or above 600 is regarded to be excellent.
Above 670 is regarded to be outstanding.
If you know this before you start looking for a property, you'll have more time to work on raising your credit score, which is vital knowledge to have.
If it's too low, get in touch with us so that we can offer you guidance on how to raise your credit score and erase your record.
What factors have an impact on your credit score?
Your credit history will be negatively impacted if you are late with payments or miss payments altogether; this is true even if you make a double payment the following month.
When you have an excessive amount of debt, both in terms of how much you owe and how much of your available credit you are using, it is best to try to keep the utilization of your current credit facilities to less than 35 percent of your limit. This will help you avoid getting into deeper financial trouble.
Negative information on a customer, such as a court judgment that has been entered against their name (commonly known as blacklisting).
How long one has had a credit history?
Account application and inquiry activity refer to the number of new accounts you opened and the number of new account applications that were submitted by customers within a short period of time.
Or you could try any of these suggestions:
Do not take on any further debt at this time. Put every cent you have toward paying off whatever outstanding debt you have at the moment. This should be your top priority.
Check your credit report on a consistent basis to ensure that all of the information is accurate.
Make it a point to pay off any outstanding balances on credit accounts ON the date when the payment is due.
In the event that you are having trouble making your payments, you should get in touch with your credit provider immediately to negotiate a new payment plan or to negotiate a reduction in the amount of your regular installments to one that you are able to pay.
Instead of making payments manually, set up recurring payments to be processed automatically.
Consider shutting down some of your old credit accounts if you have an excessive number of dormant ones.
If you are getting close to reaching the credit limit on one or more of your accounts, you should work on lowering the balances on those accounts first. If you have outstanding balances, it indicates that you are responsible for a significant amount of debt.
Make sure that there are no mistakes in your credit score. Errors caused by humans might occasionally contribute to a lower credit score. Check your information twice to ensure that it is correct and that it has not been altered in any way whilst your score was being calculated.
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