How Much Is A Good Credit Score In South Africa
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Having a good credit score is important in today’s world. A good credit score can help you get loans, housing and even jobs more easily. In general, the higher your credit score, the better it is. However, what exactly makes up your credit score? What are the different factors that go into your credit score? How do you get a good one? Read on to find out more about how much is a good credit score in south Africa.
What is a Good Credit Score?
A credit score is a three digit number that measures how risky you are as a borrower. The higher your credit score, the better it is. Credit scores are used in many aspects of your life. When you are applying for a mortgage, auto loan, or a new job, the lender or potential employer will look at your credit score. What makes up a good credit score? The exact number that makes up a good credit score will vary by country, lender, and industry. However, there are some general guidelines. Generally, a score of between 700 and 800 is considered excellent. A score between 600 and 700 is considered fair. Any credit score below 600 is considered poor.
Factors that Determine Your Credit Score
There are five main factors that determine your credit score: –
– Your Payment History – This is the most important factor in determining your credit score. Forty-five percent of your score is based on your payment history. Your payment history is the record of how often you have paid your bills on time. For example, if you have missed payments.
– Credit Utilization – This is the amount of debt that you use compared to the amount of your available credit. Thirty-eight percent of your score is based on how much of your credit you are using. For example, if you are using a ton of credit at the same time.
– Age of Credit History – Another factor that makes up ten percent of your score is the age of your credit history. This means how long you have had credit. Generally, the longer you have had credit, the better it is for your score.
– New Credit – Ten percent of your score is also based on how many new credit accounts you have opened recently. For example, if you have applied for a bunch of new credit cards recently, your score will drop.
How to Improve Your Credit Score in South Africa
As you can see, there are a few ways to improve your credit score. Some ways to improve your credit score include: –
– Paying your bills on time – This is the most important way to improve your credit score. If you pay your bills on time, your score will increase.
– Paying more than the minimum – If you are making payments but not paying more than the minimum, your score will not increase.
– Closing accounts – If you close accounts, your score will decrease.
– Increasing your credit limit – If you increase your credit limit, your score will decrease.
– Getting a secured credit card – If you are just starting out and don’t have a credit history, you can open a secured credit card. A secured credit card requires you to pay a deposit of a few hundred dollars. When you pay your bills on time, this will help you to build your credit score.
– Having new credit – If you have applied for new credit, your score will decrease. It will go back up after about six months.
– Keeping balances low on your credit cards – If you keep your balances low, your score will increase.
Check your credit score for free
You can check your credit score for free at any time. Just go online and you can get a free credit report. There are many services that will let you check your credit score. You can check your credit score online, by phone, or through the mail. The results you get will be based on the information that creditors have on file. The credit score you get may be different from the score a creditor uses. That’s because credit scores use a different set of criteria. For example, if you have missed payments, your credit score will be lower than your credit report.
Having a good credit score is important no matter what stage of life you are in. If you are just starting out, you can use the above tips to help you build your credit score. If you are looking to buy a home, or you are in the process of applying for a job, a good credit score can make the difference. If you already have a good credit score, make sure to keep it that way by following the above tips.
