Buying a vehicle through the banks can be a daunting experience, especially for first-time buyers. Luckily, Sales Executives from all Kelston dealerships are always ready to help clients complete vehicle finance applications. Generally, the dealership staff sends applications to ALL banks. The various banks that process your application will then first find out your credit score - which is a deciding factor. If you desire to buy a car one day, you need to know your credit score and start looking after it now!
So, what is a credit score?
When you apply for credit for a car, you are asking the bank to lend you hundreds of thousands of rands over a certain period. Every bank you apply to will want to know whether it can trust you to pay them back. This is where your credit score comes in. So, in simple terms, a credit score is a measure banks use to determine whether an individual is trustworthy.
Having a good credit score is very key if you plan on buying your car through bank loans. Here are three basic tips to help you head towards achieving a good credit score.
1. Pay your current bills timeously – Bhatala amatyala akho akhoyo kwangexesha
If you want a bank to lend you a significant amount of money, they will expect you to be good at paying the monthly bills you already have. What would motivate them to give you their money if you are struggling to pay your current debts? If you want to make a good impression, make sure to become diligent about paying your bills and do not fall behind on payments.
2. DO NOT apply for loans too often – MUSA ukufaka isicelo semali mboleko rhoqo
Unfortunately, banks look at how often you apply for credit and how often you have made applications in the past and use these findings to judge you harshly. From the banks' perspective, only people with hectic money problems apply for loans to numerous places. When they [banks] see these applications, they will see that as a red flag because it might mean you are in trouble financially.
3. DO NOT use too little credit – Yiba nawo amatyala noba ambalwa
We know we just said too much credit is bad, but too little credit is not good either. This may sound confusing, but please hear us out. As we have previously mentioned, banking institutions want to know that you are good at managing credit and paying back loans. If you do not have any loans or credit at all, banks will be unable to tell whether you are good or bad with credit, and to be on the safe side, they will assume the worst.
If you have never had credit and you plan on making a BIG car loan your first credit application, chances of becoming successful are nil. The banks will probably decline your application because you need a credit history. Try to build a positive credit history by, for example, buying a cell phone on a contract or getting a credit card and paying it off to zero every month.
