Figures from Leading Reals Estate agents are showing that Bad credit records are the most significant cause of Bonds that are being rejected and this is not isolated to an individual bank, all of South Africa’s banks are likely to reject the same application if the applicant has a bad credit record.
The events that cause the most problems are firstly judgments and secondly if there are any amounts that have been written off as bad debts by banks. These two events will put your chances of getting a bond at almost Nil. It is so important to monitor your credit record which is freely available to you once a year at no cost from Trans Union.
Affordability and a shortage of good cashflow are also major reasons the banks are rejecting loans and based on what we have read, the applicants honesty at declaring their correct expenditure plays an important role here. It is also important to pay particular attention to how your conduct using your banking accounts will be perceived by the banks. If you regularly go over your overdraft limit or have rejected debit orders, this pays a big role in how the banks view your risk profile.
Perhaps the most contentious is the poor approval history for those who are self employed. Being self employed and being able to prove your income is the issue that the banks are most concerned about, so take a good look at your bank statements, both personal and business, and calculate your proveable income before applying for a bond.
There are other factors such as poor financials that can be rectified and it is important to note that you need to provide all of the information requested by the banks, in a format that is easy for them to make a decision from or your bond application will be rejected. Honesty about your expenditure is paramount, you could burn your chances by dishonest.