A lot of tears have been shed in our office by persons wanting to provide a house for their families, but not qualifying for a home loan due to a bad credit record.

The question arises on how to avoid or manage this financial pitfall?

If a prospective homeowner has not kept up to date with their credit bureau reports, they will be in for a surprise when they apply for finance.

If there is negative information on the applicant’s credit history, it is highly unlikely that they will be approved to receive finance from a financial institution. This emphasises the importance of checking one’s credit reports on an annual basis.  An important side note:  There are websites that will check your ITC every month and email you a report.  However, these monthly checks will be seen as possible creditors checking your credit score and will negatively affect your ITC records.  It is only necessary to check your ITC records once per year.

Already listed on ITC?

Removing a blacklisting can be a taxing, drawn-out and costly process which differs from one case to the next depending on the circumstances.

The most listings will remain on someone’s credit record for two years.

If the debt has been settled, a request can be made by the creditor to the bureaus to amend the listing to reflect that the outstanding debt has been paid in full.  Sometimes obtaining such a proof of payment is more difficult that it sounds.

A judgment from a court is more complex and will not be removed as soon as the debt is settled but will remain on the credit profile for five years before it is automatically removed.

Once settled, an attorney can then apply to have the judgment rescinded. The creditor will need to provide their consent before the judgment can be rescinded.

Here are tips for prospective home buyers to avoid black listings:

-           Read all clauses before signing a contract with a creditor.

-           Make regular payments to creditor by the 7th of each month.

-           Keep a list of all creditors, the basis of credit and amount to be paid.

-           Keep a record of all payments made to creditors.

-           If you relocate, notify all creditors of the change of address.

-           Attend to all correspondence from creditors or their legal representation.

-           If you are unable to pay your creditors, make a written arrangement to restructure the 
            payments where possible.

If you have any enquieries regarding your ITC and the impact on your property purchase, talk to our specialists to assist you.