Q: In today’s economic climate, is having a good credit score vital when buying your first home?
A: The short answer is a resounding “Yes!”. An economy typically runs on credit. How good or bad your credit score is, will have an influence on almost every aspect of your financial life.
From a property perspective, whether you are renting a unit or buying a new home, a strong credit score will be a great benefit as it is a consideration for both landlords and lenders. It increases your prospects of meeting lending or renting approval conditions.
Doors that will open to you when buying your first home include:
- A faster approval process, cutting out the stress of a long wait for the outcome
- Lower interest rates, resulting in saving a significant sum of money over time
- Independence, as a good credit score goes a long way in eliminating/softening the requirement for large deposits or sureties
- Less onerous loan terms and conditions
Following on the above, a good score provides you with leverage to negotiate throughout the bond approval process. Once you have a rate and terms from one lender, you can approach others to ascertain whether they can better the offer. It is a worthwhile exercise, and other than time, costs nothing.
It is crystal clear and wholly accepted that good financial habits are never wasted. Good credit scores are mainly built and maintained by paying your accounts on time, and not letting debit orders bounce.