The Steps to Get Your Credit Score in South Africa
How do I build my credit score in South Africa?
How to improve your credit score quickly
- Check credit reports for errors: One measure you can take immediately is to check your credit report for errors and inconsistencies. Your credit record is calculated by credit bureaus, using your payment and account history, but the report could be subject to mistakes.
- Pay off outstanding debts.
Outstanding debts have a significant impact on your credit record, so pay off as much and as many as you can. Start with credit card accounts as they usually have the highest interest rates.
- Reduce your credit ratio.
The gap between the amount you owe and the limit to your credit affects your credit record. This is known as your credit utilization ratio. For example, if your available credit is R20 000 and you owe R10 000, your credit utilization ratio is 50%.
- Settle and close accounts.
Closing accounts after you’ve settled them will reduce the number of credit accounts attached to your name.
- Avoid using credit.
Naturally, you should show restraint when using available credit while you take the necessary steps to improve your credit record.
- Ensure your spouse takes the same measures.
The credit record of your spouse will also be taken into account if you apply for a joint home loan, or are married in community of property.
What is a good credit score South Africa?
In South Africa, the rating of credit scores are as follows:
- 670+ = excellent.
- 650 – 669= good.
- 634 – 649 = average.
- 618 – 633 = below average.
How can I Boost my Credit Score in South Africa?
- If you have no credit score, try opening some small retail accounts or a cell phone account, and pay it back on time and in full each month.
- Try to settle the outstanding debt as quickly as possible.
- Do not take on any more debt.
- Reduce spending wherever you can.
- Do not miss payments.
- Stay informed of what your credit score is.
