To get a home loan, you must meet the minimum credit score. Fortunately, if you have a good credit score, you will have a better chance of getting a home loan approval. The home you always want to have for one reason or the other could really become yours. And you must not forget that priceless grand feeling you have when you finally actualise your goal. Minimum credit score, who calculates it, what you can do to know it are all-inclusive in this article.
What is a credit score?
A credit score is the numerical expression that describes a person’s credit files. Besides that, it represents the creditworthiness of an individual. The credit score of individuals primarily comes from a credit report. And they get this information from credit bureaus.
What is the minimum credit score I can have to secure a home loan in South Africa?
In South Africa, a credit score of 600 and above will give you a fair chance of home loan approval. This might not be the same credit score that other banks would accept. However, they see a score of 670 and above as an excellent credit score. It will definitely boost your chances of getting a home loan approval. Obviously, they consider credit scores below 600 as an enormous risk for the banks.
Is it possible to get a home loan with bad credit in South Africa?
Sometimes, many individuals might not know that they have a bad credit score. Possibly, this could happen because of an error from the credit bureaus. In this situation of having a bad credit score, you can get a home loan. Especially if you request a correction on your credit report from the credit bureau.
You can get a home loan depending on how bad your credit rating is. However, they will reject your home loan application if they blacklist you with the credit bureau.
Across all financial institutions, the higher your credit score, the better for you to get a home loan.
Who calculates my credit score?
For whatever reason you need a loan, it’s nice to know who calculates your credit score. The credit bureaus calculate your credit score based on your financial behaviour, which could be positive or negative. The early payments you make, as your repayment term says, reflect on your credit score. Loan providers consider your credit score before they give you a loan.
What credit score do I need to get a home loan in South Africa?
For a home loan in South Africa, you must possess a good credit score. Your credit score should be 640 and above if you want to increase your chances of getting a home loan.
General credit score in South Africa?
You can avoid a negative credit score when you know what makes up a credit score. In South Africa, a credit score ranges from 300 to 850. This range of credit scores shows your credit rating. And it depends on the positive or negative information they get in your credit report. When your credit score is between 300 and 579, they consider it to be bad. Whereas, they consider it to be good when your credit score is above 700. They also consider your credit score to be fair when it’s between 580 and 669.
What is a credit report?
Credit report is almost the first thing any bank will get when they receive your loan application. They get the credit report on your credit profile from the credit bureaux (TransUnion, Experian, etc.). Because of this, it makes sense for you to request a report of your credit score as soon as possible.
In South Africa, the National Credit Act entitles everyone to one free credit report yearly. However, you can get more regular reports for a price near R80.00 per report.
What is the information in my credit report?
Your credit score reveals all your financial behaviour, which could either be good or bad.
The following is the information your credit score bears:
- The amount of money you owe
- Your payment history
- The activity on your bank account
- How long you have used your accounts
- The number of credit check on you
What can I do to know my credit score?
It is very important to know your credit score from time to time. This is because the credit score changes because of various financial transactions you make. Besides that, there might be errors while bureaus work on your credit score. In South Africa, everyone has the right to one free credit report from any credit bureau yearly. You can also get your account status, credit score, and summary for a small fee.
Conclusion
Lenders won’t like to take a risk by giving you a home loan when you have a bad credit score. Therefore, with the knowledge of the minimum credit score for home loans in South Africa. You can now try as much as possible to measure up with the minimum credit score. Making payments conformably and avoiding debts will go a long way in adding good scores to your rating.