Can I buy a house if I have a bad credit score?

Most likely not from a major bank. When you apply for a loan, the lender will attempt to evaluate the level of risk associated with your credit history. What are the chances that you will be able to repay them on time if they do decide to lend you some money? The majority of lenders will look at your credit score to gauge how much of a risk you present to them.

Your credit score affects the number of available loans as well as the terms of any loan that may be offered to you by a lender. Lenders may give credit to you even if your score is low or may deny your request for loans even if your score is high depending on how they interpret this information and based on the unique screening guidelines that govern their business.

Before a bank will even consider processing your application for a house loan, they need to see that you have a clean credit history. On the other hand, positive credit history does not develop overnight. If you are thinking about buying a house in the near future, you should start working on raising your credit score as soon as possible. Paying your payments on time and in full is the single most important thing you can do to improve your financial health.

If you want to have a solid credit history, don’t take on more debt than you can pay off, and then make sure you pay off all of the debt you already have, however this is not to say you close all your accounts, you just need to manage the limits on each account . So let’s discuss that further.

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What is the minimum credit score required for a South African buying a house?

  • Credit score below 527: Despite the fact that it is highly unlikely that people in this credit score range will be able to qualify for a home loan with the major banks or lenders, there are still options to find lenders who can assist. For buyers who fall into this minimum credit score band, unsecured loans from a second-hand lender might be a reasonable choice.
  • Credit score from 528 – 602: A credit score in this range is typically regarded as a risk by banks and other lenders due to an some negative factors in the credit history. This may make it difficult to get a low-interest loan and may require a higher deposit.
  • Credit score from 603 to 649: With a score in this range, it shouldn’t be too difficult to get approved for a personal loan. On the other hand, if you want a high loan amount from a major lender like a bank, you might have to put down a larger deposit.
  • Credit score from 650 to 669: A credit score in this range is regarded as good. Most lenders are willing to process applications with this score, and applicants with such a score are typically referred to as “creditworthy.”
  • Credit score from 670 to 705: This is one of the highest credit score categories, thus applicants in this range have a considerably better chance of qualifying for a loan. Those with this credit score may also be eligible for lower interest rates.

What is a bad credit score?

According to the table above, a below-average credit score is less than 603. Those in this category are at the bottom end of the credit-active population, and lenders will regard them as risky.

If this describes you, it’s important to remember that there are still ways to increase your credit score, so don’t give up. If you have a low credit score, keep in mind that larger lenders like banks are unlikely to process your application due to the uncertainty of your financial history. However, just because it is difficult to reach does not mean that it is impossible.

Why Does a Good Credit Score Matter?

Most people will save hundreds of thousands of Rands over the course of their lives if they have a decent credit score. Someone with good credit gets better interest rates when buying a house, car loans, and other types of finance.

Individuals with higher credit scores are considered lower-risk borrowers, and more banks compete for their business by offering reduced interest rates, fees, and incentives. Those with low credit, on the other hand, are deemed higher-risk consumers, with fewer lenders vying for them. You can get a free report from Clear Score.

How can I improve my credit score in South Africa?

Review Your Credit Reports

It is vital to understand what factors may be working in your favour in order to boost your credit (or against you). “A history of on-time payments, low credit card balances, a variety of different credit card and loan accounts, older credit accounts, and fewer queries for new credit are all factors that lead to a better credit score. Late or missing payments, excessive credit card balances, collections, and judgements are all key credit score destroyers.

Stay on top of payments

As can be seen, the most significant factor that goes into determining your credit score is your payment history. It is to your advantage to pay your debt in a timely and responsible manner. Avoid late payments at all costs.

Limits Your Requests for New Credit

There are two sorts of queries that may be made into your credit history, and they are typically referred to as hard and soft inquiries.

A standard example of a soft inquiry would be for you to check your own credit, for you to give permission to a potential employer to check your credit, for financial institutions with which you already do business to check your credit, or for credit card companies to check your file to determine whether or not they want to send you pre-approved credit offers. All of these would be considered soft inquiries. Your credit score will not be affected in any way by soft queries.

Hard inquiries, on the other hand, might have a negative impact on your credit score for a period of time ranging from a few months to two years.

The application for a new credit card, buying a house, a car loan, or any other type of new credit might be considered a hard inquiry. It’s unlikely that the occasional in-depth investigation will have much of an impact.

Dispute credit report errors

It’s possible that a mistake on one of your credit reports is negatively impacting your overall score. You may immediately improve your credit score by disputing inaccuracies that appear on your credit report.

How long will it take for improvements to show?

According to, changes to a credit record often begin to show up after around three months, however, it is advisable to wait approximately six months before reapplying for credit.


[1]“What’s the minimum credit score you need for a home loan? | ClearScore ZA,” ClearScore. (accessed Oct. 19, 2022).

[2]“How to clear your credit score if you want to buy a house,” ooba, Apr. 29, 2022. (accessed Oct. 19, 2022).

[3]“Investopedia,” Jul. 18, 2022. (accessed Oct. 19, 2022).

[4]“NerdWallet.” (accessed Oct. 19, 2022).

[5]M. Black, “How To Improve Your Credit Score | Bankrate.” (accessed Oct. 19, 2022).

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