How To Build A Good Credit In South Africa
In South Africa, what constitutes a good credit score?
A three-digit figure, ranging from 0 to 999, will represent your credit score.
For the bank to even evaluate your application for a house loan, your credit score must be at least 600; anything over 650 is seen as a respectable credit score.
To have a reasonable chance of having a house loan accepted, one typically requires a credit score of at least 600. The better your interest rate and likelihood of approval are, the higher your credit score, the better. The same is true for deposits: putting down a bigger deposit will increase your chances of obtaining favorable terms.
How to improve your credit score
If you lack a credit rating
- Use a cell phone or a modest retail account, and always make prompt, full payments each month.
- Try to pay off the outstanding debt as soon as you can.
- Don’t accumulate any additional debt.
- Spend less money whenever you can.
- Avoid skipping payments.
- Pay any unpaid invoices.
- Pay on promptly for all of your incoming bills.
- Don’t just make the bare minimum payment toward your bills.
- Recoup your credit card debt.
- Do not use all of the credit on your store and credit card accounts.
- Pay off bank loans, cell phone debt, and retail credit—especially those for other assets like a car.
- If at all possible, avoid creating new credit accounts.
- Look for errors in your credit report and dispute them with the credit bureau that handled it.
- Once the outstanding sum has been paid, close your accounts.
- Keep yourself informed about your credit score.
Why is having a good credit score so crucial?
As already discussed, having a high credit score is necessary for your home loan application to be granted. Additionally, it gives you a stronger negotiating position with the bank and raises your chances of obtaining a house loan with a favorable interest rate, which will ultimately save you money.
How quickly can your credit score be raised?
Improvements typically begin to appear on the credit report after three months, but it’s advised to wait six months before reapplying, according to businesstech.co.za.
What age is ideal to begin establishing credit?
And an excellent way to get started is by getting a credit card when you turn 18 so you can start building credit and learning responsible financial practices early on. The benefits of getting a credit card at age 18 are discussed here, along with steps you may take as a new cardholder to safeguard your credit rating.
