What I Wish I knew Before Buying My First Home
Early on, I knew renting wasn’t for me. I wanted my independence and to be in control. I started to put money aside for “one day,” worked on clearing up my debt and started thinking about the property ladder and how it would happen. After several years of saving, and slowly looking at places on and off for three years, I was successful with my offer of tender on my first home a small two bedroom apartment purchased at a mortgage sale. I am grateful I had the help of my parents and a lawyer during the process, but I had A LOT to learn. The hardest part, or most dreaded, was working with the banks around getting a mortgage. I even had to change banks to get the best rate. They ask a lot of questions and carry out background checks on you. The phrases “credit check” and “credit report” were mentioned a lot, and sometimes hard to understand what all this financial jargon means.
Eight months have now passed, I am moved in and starting to feel settled. Recently, those phrases “credit check” and “credit report” popped up again. One of the utility companies I use checked in on my credit score, which got me thinking and exploring more. I asked myself, “What is this credit score and what can I do to make it better?”
I had heard about Credit Simple while sitting at the movies so when I got home, I decided to check it out. Credit Simple is a free service that helps you pull back the curtain on your credit score and something I wish I had known about five years ago when the quest to buy a home started.
I headed to the Credit Simple website and signed up. It only took a couple of minutes to input my personal information before I was instantly given access to my credit score and credit report.
My score was 528. I was hoping it would be higher, but I am happy with it.
Credit Simple breaks down your score and provides a report as well. This report shows you how you can improve your score. Straight away I identified some red flags that could be harming my credit score. I could see that when it came to my Vodafone bill I had made repayments 1-29 days past the due date in June, May, and April this year.
I get paid monthly, and these bills are due the day before pay day. So, to avoid this, I have paid a guesstimate on pay day for the month ahead. It meant one month I chucked over $150 on the bill, but being ahead on the payments is better than being behind right?
Keeping tabs on your credit score also means you can query items that you think are incorrect. You can spot inconsistencies and stay on top of everything before it’s too late.
If you are aware of it and work to improve it, it could mean that when you come to buy that first home, or if you need a loan, the banks will be able to determine how credit worthy you are. If you have a positive score, this gives you a lot more wriggle room when it comes to negotiating deals and getting great interest rates.
It is not just banks either - I learnt you can negotiate the cost of power and phone accounts, mobile phone accounts, broadband and personal loans using your credit score – definitely one thing I need to relook at in my new apartment!
So, what are you waiting for? Head to CreditSimple.co.nz now and if you have any questions, ask me. The Credit Simple website has a lot of great information and I’ve been doing so much reading that I feel like an expert! I will certainly be ready for next time I purchase a property.
Thank you, Credit Simple for helping me write this blog post.