What is a Good Credit Score in South Africa? – A Beginners Guide
Photo by TerriC on Pixabay
Have you ever wondered what a good credit score is in South Africa? If so, you aren’t alone! There are so many different methods used to calculate a person’s credit score. So how do you know if your credit score is good or not? Many people don’t even realize that their credit score can be checked online in just a few seconds with some simple information that most people have access to. In this article, we will explain everything you need to know about a good credit score in South Africa and how you can improve yours.
What is a Good Credit Score in South Africa?
A good credit score in South Africa means having a score above 750. Now, it’s important to note that there are different types of credit score and each one has a different range that it assigns a certain percentage of people. For example, a FICO Score ranges from 300-850 and an Equivalence Score ranges from 300-800. So, depending on the type of score that you are looking for, you may find what works best for you. When calculating a credit score, the main factors that lenders will use to determine how likely it is that you will repay your debts are: – The debt to income ratio – How much income do you make compared to how much debt you have? – The number of credit accounts you have – How many times have you been late on payments? – The length of time it took you to pay off your debts – How long did it take you to pay each debt back? – The amount of available credit you have – How much credit do you have available to you?
– The type of credit you have – What type of credit are you applying for? – The number of applications you have – How many applications have you made? – The number of times you’ve been turned down for a loan – How many times have you been turned down for a loan by different companies?
What determines a Good Credit Score in South Africa?
Lenders will use a variety of factors to determine your credit score, but the main things that will influence your credit score are your debt-to-income ratio, the number of times you’ve been turned down for loans, the total amount of credit you have, the type of credit you have, how long it took you to pay back your debts, and how many accounts you have. Now, while each of these factors may not seem too significant, they all make up the “bigger picture” that lenders use to determine how likely it is that you will repay your debts. So, the more positive things your credit score shows, the better it is for you.
How to Improve your Credit Score in South Africa
The best way to improve your credit score is to consistently pay your bills on time. This may sound like common sense, but it is actually the number one reason why people’s credit scores are bad. If you haven’t already, start paying a small amount of your bills late. This will help build the “negative” part of your credit score a little more each month. Another way to improve your credit score is to open a few credit accounts. This will help show lenders that you aren’t just taking out large amounts of debt, but are actually using it as well. By opening a few small accounts like a credit card and a savings account, you will be showing that you have a “normal” lifestyle and will be easier for lenders to trust.
Check your Credit Score for Free
One of the best ways to see if your credit score is good or bad is to check it for free. There are many different ways that you can check your credit score online, and they will usually only take a few seconds. First, you will need to know your credit report number. This is usually three to six digits and can usually be found on your credit report. Next, go to yourcreditreport.com and input your report number and date of birth. You will then be able to see your credit report for free and do some basic edits to it. You can edit your name, address, and other minor details that may be incorrect.
Conclusion
If you would like to improve your credit score in South Africa, then start paying your bills early and open a few small credit accounts. If you don’t know where to start, you can always contact a credit repair service for help. Remember, a good credit score can help you get better loans, such as mortgages and car loans, as well as save you more money in interest. So, don’t let a bad credit score stop you from living the life you want!
