A Fin24 user, who has just come out of debt review, was told he first needs to get his credit score up before he can obtain vehicle finance. He writes:
I was under debt review for two years, completed paying all the debt and am awaiting a clearance certificate.
During the two years none of the creditors paid updated anything on my monthly report with ITC.
This is a concern to me as I paid double the amount per month originally requested and am sure this failure to update has negatively impacted my credit score.
I was told that the National Credit Regulator (NCR) will clear my record once they receive the clearance certificate from Debt Busters.
My concern is that I checked with some vehicle finance providers and they are saying that I would have to wait six to twelve months before I can apply for credit to first get my credit score up.
Is that correct? I really need to purchase a car. What else can be done to get finance and do all banks work on the following principle?
A spokesperson of Absa responds:
Each bank will apply a credit assessment process that considers past credit and payment behaviour to determine the likelihood that the new loan will be repaid as agreed.
Your credit score is a function of this historic behaviour, and will be higher the better your credit history.
Credit scores generally place more weight on recent than on past credit performance, and so, in your case are likely to improve with time (and allow you to qualify for a new vehicle finance loan) if you maintain your credit lines in good standing.
Absa does not apply a strict time-based rule to customers out of debt review applying.
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