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  • Writer's pictureKeelan Francis

Rotten Credit Profile – how borrowing against a home loan restored credit record

Flip and Rene are married in community of property and have two dependent children living with them. They own their own house and, over the last 21 years, and have managed to bring their bond down to R16 000.

Unfortunately, they have not been very good with the rest of their accounts and have two judgments and four listings with the credit bureaus.

When they decided to renovate their house to give their teenage children a little more space, they approached the bank for finance. But although their joint income of R12 000 per month would normally have been sufficient for the bank to lend money, their poor credit profile meant they were turned down. They even looked at taking out an expensive personal loan to do the alterations, but credit issues also meant they were declined.

They asked Mattfin for help and while we were able to put together a quotation for consolidating their existing debt by taking out a second bond on their property, we had to inform them that we would not take on the extra debt needed for the alterations until they had proved they could live according to their budget and change their spending habits.

We were able to consolidate their existing loans as well as settle their debt that was listed and for which there were judgments taken. We then went to court for them and got their judgments rescinded and removed all the listings from the credit bureaus.

Flip and Rene have been paying us for the past six months and we have applied to the main stream banks for our bond to be switched out and transferred to their names.

Their total consolidated debt is R300 000 but because of their clean credit record and the good payment profile they have built up, we have been able to secure them an extra R60 000 so that they can now afford to do the alterations that they initially intended to do.

The difference being that they can now afford it as it is at the lowest interest rate possible unlike their initial plan of doing them through a personal loan and they have learned to budget properly.

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