Did you forget to pay last month’s electricity bill? Or do you have an overdue phone bill? Chances are if you answered yes, it’s costing you more than you think!
But be warned, late repayments and credit card debt can cost you a lot more than fees. It could cost you your home loan!
Even the smallest late payment will likely be recorded on what is known as your ‘credit file’, a record of your dealings with credit providers.
Information from the file is available to home loan providers and they will use it when assessing your creditworthiness and making a decision about your home loan application.
The information will include credit applications made in the past five years, existing loans and debt, default notices, fraud convictions and court notices – to name but a few.
Lenders use this information to assess your borrowing capacity and your ability to pay back any loan that you might take out.
It is important that you keep your credit file as blemish free as possible so that when the time does come to buy a property, securing finance need not be a worry.
One late electricity or phone bill may not seem like a big deal, but any ‘black marks’ or blemishes remain on your file for up to five years. Serious incidences can remain on file for much longer.
Even if you aren’t considering applying for a home loan anytime soon, remember that a late repayment now could impact you years down the track.
Tackle any ‘black marks’ quickly. Repay any outstanding debts and speak to your credit provider to ensure your account is updated immediately.
If you have any concerns regarding your credit file, we can access it for you for a small fee.
If you would like to know more about your credit file or are interested in a creditworthiness ‘health check’, please contact us today.