Home Loans

Being blacklisted or having judgements against your credit name can have long-term implications. Although you’ve climbed out of the debt trap and are living very closely to a new budget, you need to heal the poor animal that is your credit history before it comes back to bite you.

Rebuilding your credit history is difficult and takes time but it is possible. The idea is to overwhelm all the bad credit with good credit information. This can be done by getting a small amount of credit from a reputable credit provider and paying it off according to the credit agreement. It goes without saying then that you’ll have to be able to afford this new credit before you can even consider this.

Get your credit history
To begin, you best set the groundwork for applying for new, albeit small, credit. Request a copy of your credit history from the NCR. Check for any common errors, such as accounts that don’t belong to you, incorrect information on your accounts, information about some of your accounts is incomplete, old negative information has not been cleared etc. Work out or ask for your FICO score. The higher your score the more credit-worthy you are.

Open a savings account
Hopefully you already have one of these. Start depositing money into it each month and build a good balance. This can be used to show your stability to a possible creditor.

Use your credit card
Make small purchases with your credit card each month and then pay of the full balance in time. Alternatively you can buy one big or expensive item and make sure that’s paid off in time. Either way, you look like a responsible debtor.

Get a loan
Once you’ve done all of the above, it will be easier to apply for and get a loan. Set up a meeting with a consultant in the loan department in the bank where you have your savings or current account. Be honest and discuss your financial problems to come to a mutually agreeable loan term and amount.

When applying for more credit, inform the financier that you’ve begun rebuilding your credit history and then show them the evidence of this. It will help swing the vote your way.