- Examine credit reports for inaccuracies.
Checking your credit report for inaccuracies and discrepancies is one quick step you can take. Credit bureaus generate your credit score based on your payment and account history, but the report may contain errors.
Contest some of the negative items on your credit report, such as late payments that were not late, and you may be able to gain a few more points.
Clear all outstanding obligations
Outstanding debts have a big influence on your credit score, so pay them off as soon as possible. Begin with credit card accounts because they have the highest interest rates.
Lower your credit ratio
The difference between what you owe and what your credit limit is has an impact on your credit history. This is referred to as your credit usage ratio. For example, if you have R20,000 in available credit and debt R10,000, your credit usage ratio is 50%.
Maintaining a credit utilization ratio of 30% or less is a solid rule of thumb. In the above example, paying down your debt to lower the 50% rate to 30% can improve your credit score. Paying your bill before the due date improves your credit score.
Along with payment history, the credit usage ratio is one of the most important elements in calculating your credit score.
- Close and settle accounts
Closing accounts once they’ve been resolved reduces the amount of credit accounts associated with your name. Having too many accounts open may harm your credit score since it indicates a high level of borrowing.
Do not use credit.
Naturally, you should use caution while using available credit while working to enhance your credit score. Avoid incurring new debt or creating new accounts.
- Ensure that your partner follows the same precautions.
If you apply for a combined house loan or are married in community of property, your spouse’s credit history will also be considered. So, if your spouse performs the same activities described above to enhance their own credit history, you increase your chances of getting a home loan.
What exactly is a good credit score?
A credit score of 600 or more is regarded acceptable and is likely to be sufficient to have your house loan application accepted, depending on the bank’s lending standards.
A credit score of 800 or more is considered exceptional, and property purchasers will go to great lengths to get one.
How can I figure out my credit score?
To establish your credit score, utilize ooba Home Loans’ Bond Indicator, a free online tool.
How can I improve my credit score in 30 days?
The most significant measures you can take to improve your credit are to pay your bills on time and to pay off your credit card balances. Payment activity is reported to credit bureaus by issuers every 30 days, so good moves can enhance your credit rapidly.
