My Credit Rating Guide

The National Credit Act (NCA) is designed to protect the consumer. In fact, consumers stand to gain because maximum levels will now be set for interest rates, fees and charges levied by banks. Plus, with the NCA in place, consumers will be protected against reckless lending and overindebtedness. Which is all good news. The bottom line is that your income and expenses will be looked at in more detail than before. If you re in a sound financial position, you should have no trouble getting finance. debt consolidation and credit

This is where MortgageSA comes into the picture. Our consultants will walk you through the process and help you to put your application together as painlessly as possible. MortgageSA pioneered mortgage origination in South Africa and facilitates one in every five bond applications. check credit rating

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News centre back to News Centre Send this article to a friend 7 June 2007 South Africans cutting out vital cover as higher rates bite As interest rates crept up again this week, many people are feeling the financial pressure and creating extra funds in their budgets by cutting out insurance cover a practice that could leave them in financial ruins. credit online rating report

Craig Deats, National Insurance Sales Manager at MortgageSA, South Africa leading bond originator and provider of insurance cover for all matters property, says that generally South Africans tend to have a egligent knee jerk reaction to higher rates and often don consider the full impact of their choices. credit score rating scale

ooking at the history of behaviours on our insurance portfolio, we can certainly say that there is an increase in the number of people not paying their insurance premiums in hard times. uman nature is such that general luxuries are not first off the budget list, but rather certain insurance policies because they are perceived as grudge purchases to start with. People seem to be willing to take a risk. But that could become a real problem should they need to finance a loss out of their own pockets at a time when they are feeling the pinch anyway. bad card credit credit people

hould something go wrong when they have no cover, it a double whammy of financial hardship that could be ruinous. Deats says that typically, household insurance and life cover are the monthly expenses that people skimp on when they are feeling a financial squeeze. free credit rating report

eople believe that they need DSTV, dinners out and other tangible consumption and tend to feel things like insurance cover are only for seemingly unlikely events so tend to stop paying. he risk seems to be small and the reality is the chances of something happening are actually small but the repercussions could be life changing for yourself and your family should you need cover and not have it. credit rating scale

Deats says though it is a basic tenet of sound financial planning to keep paying insurance premiums and cut costs elsewhere. eople should draw up a budget and take a long hard look at discretionary expenditure, particularly on luxury items. That what needs to drop off the budget first. bad credit rating

t also a very opportune time to get new quotes because you may have been paying too much for premiums. It is often possible to negotiate lower premiums especially if your circumstances or lifestyle has changed. credit rating agency

Deats notes that if people are correctly engaged by their properly qualified financial planners, the necessity of maintaining insurance despite the financial pressure would have been understood and they would know that policies can be cancelled. ould you cancel your car insurance or medical cover if you were cash flow strapped credit rating canada

ot likely, because generally we understand the importance of these covers as well as the risks of not having them. However when it comes to life cover and household insurance, the benefits seem so far off and the risk remote so we take needless risk. bad credit mortgage rating

News centre back to News Centre Send this article to a friend 2 July 2007 Variations in banks lending criteria means bigger role for bond originators under NCA Since their advent in 1999, bond originators have made a business out of taking the hassle out of securing home finance by helping homebuyers navigate the lending laws, doing the application paperwork and securing the lowest bond interest rate all at no charge. good credit rating

But now under the new National Credit Act (NCA), that role is set to expand. Saul Geffen Chief Executive of MortgageSA, SA leading mortgage originator that has placed 300 000 people in their homes with over R130bn in mortgages, says that the new legislation means consumers need greater advice and better guidance in meeting the more demanding application requirements for homeloans. his means an even bigger role for originators to advice people step-by-step what they need to ensure they will meet the new requirements, and to shop around the banks for the best deal. credit score rating chart

his is particularly true as early experience of the NCA has shown that there is wide variation in banks lending criteria so we have seen that people declined by one bank are often approved by another if the application is shopped around. credit mortgage rating poor

n fact with two major banks we have seen decline rates actually drop since the NCA came into being meaning that many more people are getting approved now. Geffen says that the biggest effect of the NCA is a longer application process as more information needs to be collated upfront but that he expects this to be a short term phenomenon as banks refine their processes and lending criteria to streamline the application. good credit rating score

onger term we expect there to be little effect on overall decline rates as banks will still lend and price for the increased risk based on the profile of each individual. The higher risk posed to the bank that they may not be able to repossess the property if deemed to have lent recklessly, will just be a factor built into the pricing models of the banks. Higher risk applicants will just receive a smaller rate concession, but will in most cases qualify for the credit. That is why it will be even more important to shop around for the best interest rate as the pricing models will also vary widely. poor credit rating loan

here is therefore really no need for people to fear the NCA. Geffen notes that before the NCA, financial institutions measured the income of an individual and allocated about a third of that income to work out the size of a bond that could be obtained. ow a credit decision will only be made after a detailed analysis of a potential buyer financial position. This includes a breakdown of all of their expenses to get an accurate assessment of disposable income because that the amount the bond granted will be based on. So some borrowers will qualify for more and some less. bank credit rating

Geffe, n says that established, reputable mortgage originators are particularly well placed to aid people get all their paperwork in order and advise them what information they need so that they have the best chance of getting a homeloan - and for the amount they aspire to. credit card for poor credit

ortgageSA has been preparing for the NCA for more than a year so we have put in place the systems, processes and training to cope with the changes. Those applying for a bond now will have to produce evidence of their last three months earnings if they have an employer, or their last six months if they are self-employed. They will have to reveal what credit cards, department store cards they own, plus the limit on these cards, the rate they are repaying outstanding debts; what goods, including cars, have been bought on credit and over what periods these agreements extend. Rates, taxes, electricity and property maintenance costs will also be looked if the buyer has an existing property. business credit rating

Aspiring homebuyers will also have to detail what they spend each month too on discretionary expenses. Geffen advises that consumers are still getting used to the NCA and often forget about some of their expenses or else have an unrealistic idea of what they actually spend. ommon omitted information includes things like entertainment (eg DSTV), eating out, domestic salaries, children s extramural fees for sport, extra lessons, realistic amounts for petrol and the true costs spent on groceries. moodys credit rating

hile it is more onerous to prove affordability, it is a really a useful exercise for people to sit down and analyse what they spend because a large number of people don actually know and are quite surprised by the outcome. The result is often a greater commitment to financial discipline. credit card with bad credit

Geffen says that it is particularly important for buyers to get pre-qualified to find out if they qualify for home finance and how for much under the NCA. his will give them certainty in knowing what they can afford and give sellers a greater deal of confidence in accepting an offer. MortgageSA can provide a prequalification certificate free of charge and without any obligation. Need some additional information personal credit rating