Fairland, Gauteng -- (SBWIRE) -- 02/21/2013 -- Ensuring that you have a clear credit record is the first and foremost step prior to applying for finance, as without a clear credit record your finance application will not be successful.
Chris De Kock, Executive Head of Sales and Marketing at WesBank, South Africa’s leading asset-based financial solutions provider, says that many of those with impaired credit records may be unaware that they are on this list, or are there as a result of “minor” infringements. “Nevertheless, the result is often the same - a bad credit rating or an adverse listing on your name can seriously hinder your ability to secure asset finance.”
When applying for vehicle finance, banks analyse your credit rating. A total of 249.70 million enquiries were made on consumer credit records in the 2nd quarter of 2011, an increase of 25.3% quarter-on-quarter and 84.5% year-on-year. Of the total enquiries made on consumer records, enquiries from banks and other financial institutions accounted for 67.9%.
De Kock says that one of main reasons vehicle applications are declined is because of the applicant’s credit profile. “As a result of the National Credit Act (NCA) and current market conditions, banks have revised their lending criteria to ensure they are compliant with NCA regulations. To optimise your chance of securing your vehicle finance loan, it is imperative to keep a tidy credit record by ensuring that all of your accounts have been paid to date before you apply for financing.
“When closing an account, it is best to rather settle the account balance and then contact the relevant credit provider to check that your name and record has been cleared. If you have a judgment on record, ensure that your account is cleared by contacting a litigation attorney to have the judgment rescinded. Proof of settlement from the creditor will also need to be provided to the Bank when applying for finance as the listing may still be on record.
De Kock says in that in order to keep a healthy credit score, consumers should follow the following guidelines:
- Ensure that you meet your monthly debt repayments on time to avoid a tarnished record.
- If you fall behind on repayments, get back on track as soon as you can.
- Always pay the minimum instalment required.
- Draw up a budget - and stick to it.
- Boost your buying power by reducing your debt. If possible, pay more than the minimum payment on your accounts to further improve your credit standing.
- If you can’t make a payment, talk to the relevant creditor about making an alternative payment plan.
- Don’t ignore a letter of demand. Always be proactive and take appropriate action.
WesBank has over 40 years of experience in asset and vehicle finance. As a leading asset-based finance provider in South Africa, we finance new and used vehicles for personal use, both privately and through dealerships, as well as leisure vehicles, and also offer expert advice and professional service to our clients.
Our other main focus is providing quality asset finance and fleet management solutions for a number of market sectors. WesBank’s asset finance services cover aviation finance, agri finance, commercial vehicle finance, company vehicles, plant equipment, office equipment, public sector finance and franchise finance. In addition, we offer personal insurance, vehicle insurance, personal loans as well as business insurance, and we are perfectly placed to structure a finance deal to suit your needs.
WesBank is a division of FirstRand Bank Limited, which in turn, is part of the FirstRand Group. FirstRand is South Africa's most innovative Bank Assurance Group with interests in Retail and Merchant Banking, Life Assurance, Financial Planning and Medical Schemes.
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