Due to COVID-19 and the nationwide lockdown, many South Africans’ financial situations and financial security have changed. This change can influence your credit score, which is why you need to keep an eye on it.
Why? Because by protecting your credit score, your chances of being accepted for the best deals on credit products will increase. It comes as no surprise that many credit providers are tightening their belts and lending criteria during this time, so make sure to put yourself in the best possible situation when it comes to credit.
It’s important to take the time to look at your income and expenses, especially in preparation for the coming months. To reduce your expenditure, you can either reduce an outgoing payment or delay it. An example of reducing your outgoing expenditure is cancelling a subscription that you no longer use or don’t use as often.
If you want to delay your outgoing expenditure, you can choose to put your payments on hold by taking a payment holiday. Applying for a mortgage payment holiday can significantly soften your financial blow during this crisis and luckily, most lenders are now offering this option.
Whatever plans and measures you put in place to manage your finances during this crisis, make sure to stay calm, collected and safe.
If you are in the process of purchasing a property and your bond has already been approved (but not yet registered), or your bond application is currently being processed, you need to ensure that you do not incur any further debt as this may impact your affordability and jeopardize your bond approval.
Any further debt that you incur before the bond is registered (an example would be applying for a credit card or purchasing a vehicle) will trigger an ITC record and the Bank will be entitled to re-assess your bond application and possibly decline same.
Some banks have advised that they will be re-assessing all unregistered bonds after lockdown has been lifted.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)