CLEAN­ING UP YOUR CREDIT FILE

Highfields' Own - - REAL ESTATE - BY CHOICE HOME LOANS

Have you ever taken out a per­sonal loan, owned a credit card or pur­chased an item on store credit? If you an­swered yes to any of these ques­tions, chances are you have a credit re­port and credit his­tory stored on file.

The big ques­tion is, how does your credit file rep­re­sent you as a po­ten­tial bor­rower?

It will af­fect your chances of get­ting a good in­ter­est rate on your home loan, or even if you can get a mort­gage at all.

What is a credit file?

Your credit file de­tails your fi­nan­cial his­tory and out­lines your pre­vi­ous deal­ings with credit providers such as credit card com­pa­nies, as well as list­ing late pay­ments you may have made. It will con­tain in­for­ma­tion re­gard­ing all credit ap­pli­ca­tions you have made in the past five years, any ex­ist­ing loans or out­stand­ing debts, and de­fault no­tices where pay­ment has not been made in over 60 days. It will also con­tain fraud con­vic­tions and bank­ruptcy or­ders.

Why it mat­ters

When it comes to tak­ing out a home loan, lenders will as­sess your credit file to de­ter­mine your el­i­gi­bil­ity as a bor­rower. If you’ve ever missed a credit card re­pay­ment or let a phone bill slip, these mi­nor in­stances may be recorded on your credit file. Al­though they may ap­pear harm­less, a credit file with mul­ti­ple missed pay­ments can say a lot about your credit habits and po­ten­tially limit the amount a lender is will­ing to of­fer you. It’s there­fore es­sen­tial to keep your credit file as squeaky clean as pos­si­ble to max­imise your chances of be­ing ap­proved for the loan you need. You can do this by mak­ing reg­u­lar re­pay­ments on any loans and en­sur­ing all bills – even the small­est ones – are paid on time.

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