Starting over with your debt

[league_of_ordinary_men]

Jokes aside

Having a good credit record is obviously important. Firstly you are in a position to receive credit. Secondly, the better your credit rating is the more leverage you have to get a better deal when entering into a credit agreement.

Understanding your leverage regarding credit is vital. You may end up with a “high risk” plan when in fact you qualify for a “low risk” plan. Financial institutions gain by having you in “high risk” because they will charge more interest. So don’t get taken for a ride.

Sound advise yet again pmb thank you.

[pmbguy]

Thank you League, you are most kind. Look I am certainly not the best guy to dispense this advice, we have real guru’s on TFSA, but I am happy to add my 2cents for what its worth.


Ps. I am glad that you are happy with your wife. Don’t ever give her up for the sake of a name combination.

[league_of_ordinary_men]

Thank you League, you are most kind. Look I am certainly not the best guy to dispense this advice, we have real guru’s on TFSA, but I am happy to add my 2cents for what its worth.


Ps. I am glad that you are happy with your wife. Don’t ever give her up for the sake of a name combination.

But every 2 cent counts thank you and it would be nice if those guru's could chip in as well.

P.S. Thank you pmb and I wont give her up for anything and I hope you and your wife can sort things out.

[ians]

Credit...now here is a sensitive topic, one of my biggest downfalls in business, not so much my person life.

Firstly, a cheque account managed correctly with an overdraft facility is a key factor in the financial world because the kind of credit which will involve the big money credit requests like a property od vehicle (your biggest loans)

Credit card with a small limit (well within your budget) is a good way to manage it, you have the facility and if managed correctly will also prove worthy.

Having a clothing account (with a limit within your budget) and managed properly is good for the smaller credit facilities like credit cards and other low budget credit facilities.

A wise man told me a long time ago..."save a little for a long time" advice that I have never lived by but seen the rewards with people who have.

Do you want a good credit, yes of course you do if you want t expand in your life, if not then stay away from it, the trick is managing it. At one stage in my life for around 8 years I had no debt and no credit facilities, best time of my life, stress free, I worked when I needed money and played when I had money, and boy did I play. Now I just work all the time and can never play because of all the little credit facilities which consume all my income. My life revolves around making enough to cover all the debt, home loans, vehicle HP, overdraft facilities and credit cards.

In 2014 I plan on changing a few things in my life, one of my goals will be to do what my wife has just finished this month. She is debt free, she set a target for December 2013 to be completely out of debt, her car is paid already paid up months ago, she no longer has an overdraft, credit card limit (paid up and reduced). So from January 2014 she only has to pay for living expenses and insurance. I have given her access to all my accounts and she will manage them from now on.

[league_of_ordinary_men]

Credit...now here is a sensitive topic, one of my biggest downfalls in business, not so much my person life.

Firstly, a cheque account managed correctly with an overdraft facility is a key factor in the financial world because the kind of credit which will involve the big money credit requests like a property od vehicle (your biggest loans)

Credit card with a small limit (well within your budget) is a good way to manage it, you have the facility and if managed correctly will also prove worthy.

Having a clothing account (with a limit within your budget) and managed properly is good for the smaller credit facilities like credit cards and other low budget credit facilities.

A wise man told me a long time ago..."save a little for a long time" advice that I have never lived by but seen the rewards with people who have.

Do you want a good credit, yes of course you do if you want t expand in your life, if not then stay away from it, the trick is managing it. At one stage in my life for around 8 years I had no debt and no credit facilities, best time of my life, stress free, I worked when I needed money and played when I had money, and boy did I play. Now I just work all the time and can never play because of all the little credit facilities which consume all my income. My life revolves around making enough to cover all the debt, home loans, vehicle HP, overdraft facilities and credit cards.

In 2014 I plan on changing a few things in my life, one of my goals will be to do what my wife has just finished this month. She is debt free, she set a target for December 2013 to be completely out of debt, her car is paid already paid up months ago, she no longer has an overdraft, credit card limit (paid up and reduced). So from January 2014 she only has to pay for living expenses and insurance. I have given her access to all my accounts and she will manage them from now on.

Good advise ians, thank you for jumping in. It still comes down to no one wants debt, but you can't get a car,house....etc basically because you don't have a credit record so you can't loan the money to buy any high value items even if you can afford it. So what I want to accomplish with this thread is to educate people who needs to get a good credit score when they can afford high value items but don't have any credit record, well not me but some of you guru's on the forum.

So basically if you have no credit score and had to get a loan for a high value item like a car or a house, what would be the best/fastest route to take to get a good enough credit score to be able to buy these types of item when you can afford to do so and the best way to manage your debt to get to your goal.

Good luck ians with your goal and I take my hate off to your wife for doing that its not easy for allot of people to do because they don't know how to manage there debt and stay in the endless loop on debt.

[HR Solutions]

Unfortunately having a bad credit rating also affects your chances of getting a new job. A lot of companies nowadays require people with clean credit history.

[ians]

Something to add about credit/HP/ bonds, no matter how clean your credit rating is or how good the deal, the bank will always look at income/turnover etc. I found a house a couple years back at a really good price almost half the value, bank was not interested in giving me a bond. I ended up having to borrow an additional R200k from a trustworthy source which I used as a deposit. the person owns a small percentage of my house, but hey it is going to take another 25 years before I own it so, hopefully Julius or the like doesn't come into power in the next 25 years otherwise I loose everything regards and the property value will fall through its own a$$ in any case.

[league_of_ordinary_men]

Something to add about credit/HP/ bonds, no matter how clean your credit rating is or how good the deal, the bank will always look at income/turnover etc. I found a house a couple years back at a really good price almost half the value, bank was not interested in giving me a bond. I ended up having to borrow an additional R200k from a trustworthy source which I used as a deposit. the person owns a small percentage of my house, but hey it is going to take another 25 years before I own it so, hopefully Julius or the like doesn't come into power in the next 25 years otherwise I loose everything regards and the property value will fall through its own a$$ in any case.

Good tip to remember, I was thinking someone should mention it, thank you for that.

[Dave A]

I'd suggest the way to go is a credit card, but you've got to settle the balance every month. If you can have and use a credit card without incurring interest charges over a reasonable period of time, it's a pretty clear signal you've got solid financial discipline.

Apart from the obvious credit scoring side, I also like the fact that it's one line of credit to manage instead of a whole bunch of store accounts - where I'd argue it's much easier to get out of your depth just because it's harder to keep track of your total debt.

Bearing in mind you're trying to build for a big purchase (car and/or house), the other thing that makes a big difference is saving. Being able to show you are able to save under your current budget not only improves the "affordability" calculation, having a 20% deposit also makes a huge difference to the interest rate you'll get charged.

[league_of_ordinary_men]

I'd suggest the way to go is a credit card, but you've got to settle the balance every month. If you can have and use a credit card without incurring interest charges over a reasonable period of time, it's a pretty clear signal you've got solid financial discipline.

Apart from the obvious credit scoring side, I also like the fact that it's one line of credit to manage instead of a whole bunch of store accounts - where I'd argue it's much easier to get out of your depth just because it's harder to keep track of your total debt.

Bearing in mind you're trying to build for a big purchase (car and/or house), the other thing that makes a big difference is saving. Being able to show you are able to save under your current budget not only improves the "affordability" calculation, having a 20% deposit also makes a huge difference to the interest rate you'll get charged.

Very sound advise thank you Dave.

[pmbguy]

I still think a credit card in the hands of most youngsters is not a good idea.