Most prospective home buyers will be aware that their credit record will influence the interest rate lenders are prepared to give them on a home loan.The better your record the better deal you get,and most people will need to get a home loan to enter the real estate and property market.

The National Credit Act is there to protect consumers in many ways.The most important of which is to protect them from incurring unmanageable debt and to agree to credit terms only once they have been made aware of all the consequences of the  agreement.This truly is a step forward and will help many people avoid the pitfalls associated with over-indebtedness.

The act is also there to protect the lender of course and if a prospective borrower does not disclose all relevant information regarding their credit status the property could well be repossessed and the borrower blacklisted.Honesty is definitely the best policy!

You can also check your credit record and there are institutions that do this for a small fee.For most South Africans a credit card is an unfortunate necessity,but it’s all about managing your debt and not giving in to frivolous,impulsive spending.The results of which could affect you for years and years to come.

The lender will check if you have kept up with payments of other debts,and their checks are rigorous.This is because it is their legal responsibility to be sure of a borrowers credit and financial status.If a borrower does default on payments the lender may be in a position to be sued for over-extending a borrowers credit.

The new Act may take a bit of getting used to but it does seem like a good idea.It encourages the borrower to keep up with payments and not to incur mountains of unmanageable debt.It also holds both the borrower and the lender responsible for honesty and full disclosure about information and practices that greatly influence peoples lives.

So don’t over-extend yourself and in the long run it will surely benefit everyone and maybe lower our interest rate.