The DTI's Removal of Adverse Consumer Information Relating to Paid-up Judgements Regulations 2014 was implemented on 1 April this year. The regulation requires credit bureaus to remove all information on their credit record relating to paid-up judgements and adverse notations about consumers by 1 June.
"This essentially means that if you went through a difficult financial patch, but have subsequently settled all of your outstanding accounts, your credit record will no longer be affected," says Justin Easthorpe, Regional Sales Manager for ooba. "The credit amnesty also requires any future paid-up judgements to be removed from your record."
This is good news for potential home buyers, who may have found that despite making amends for unpaid credit and being in a more secure financial position now, they were still unable to get home finance. Despite this, it is still a good idea to run a free credit check - which you are entitled to do annually - to make sure that your record has been cleared.
"Of course, this doesn't mean that you don't have to pay your debts," says Easthorpe. "Maintaining a clean credit record is still the best way to ensure that you are looked upon favourably by the banks when applying for a home loan. But it does mean that it is now easier to recover from past judgements."
A credit check should form part of the prequalification service offered by bond originators and some banks. Your credit record will be assessed and your affordability calculated. The bond originator or bank will then issue you with a certificate that states the amount that you will be likely to qualify for.
"This is of great benefit to the buyer, because it lets you house hunt in a realistic price range with the confidence that your bond application will most likely be approved," says Easthorpe. "It gives the seller and their agent a level of certainty that you are a serious buyer and that you are able to come up with the finance you need to buy the home."
Ooba's prequalification service, oobaqualified takes things a step further. If there is some kind of problem with your credit rating, it helps you to take steps to rectify this. And if your affordability is too low, ooba's experts will counsel you on how to manage your other financial obligations to free up more disposable income.
"We believe that these 'next steps' in the oobaqualification process are vitally important to the home-buying process," says Easthorpe. "We don't just want to offer our applicants a yes or no answer with an amount - we want to help put them in their new homes."
He adds that it's a really good idea to do this at the prequalification stage rather than at the bond application stage, because this will give you enough time to take the necessary remedial steps if you need to. "Prequalification costs you nothing, arms you with knowledge and just makes sense," he adds.
