The Credit Traps to be Aware of

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As a consumer you should always think twice about applying for credit with any financial institution, as it could prevent you from obtaining finance for a home loan when you are ready. When you apply for any type of credit it goes on your file and will affect your credit score, even if you don’t take out that credit. Financial institutions take this score into account when considering your loan applications.

Even worse is credit defaults: if you have a default on your credit history, financial institutions will decline your loan immediately.  So make sure you always pay your bills.

When you decide it is time to go ahead and purchase your first property, you will be required to supply a lot of information to get your application approved. One of the biggest things that most people forget to declare is any debt they have, and this is a big mistake when it comes to financial institutions. All financial institutions expect expect full disclosure from potential clients, and they must declare all debts including Personal Loans, Credit Cards, Store Cards and any other Finance they have taken out to purchase goods. Financial institutions do thorough credit checks when loan applications are submitted and nothing gets past them. In some cases they will request clarification as to why something wasn’t declared, while in other cases they will simply decline the application without asking why.

So make sure you always declare your credit liabilities when asked about them, because it will make the loan process a lot smoother.

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Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Any mention of interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

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