Credit Score System in South Africa
In South Africa, Your credit score will be a three-digit number ranging from 0 to 999. You need a credit score of at least 600 for the bank to even consider your home loan application.
What is the lowest credit score in South Africa?
The following are a breakdown of credit scores range from lowest below:
- Under 300: No Credit.
- 300-579: Poor.
- 580-669: Fair.
- 670-739: Good.
- 740-799: Very good.
- 800-850: Excellent.
Is 580 a good credit score in South Africa?
In South Africa, credit scores can range from 300-579: poor, 580-669: fair, 670-739: good, 740-799: very good and 800-850: excellent.
What is a very bad credit score in South Africa?
In South Africa, according to vantage score, the company says a credit score is poor if it’s between 500 and 600, while a score from 300 to 499 is referred to as very poor. “In general, people with higher scores can get more credit at better rates.
How do I fix my credit in South Africa?
The following are possible ways to fix or may even improve your credit score within 30 days.
- Check credit reports for errors
One of the most important measures you can take to improve your credit scores is to check for inconsistencies or errors in your credit score with credit bureaus, utilizing your payment and account history, check the reports properly for any mistakes.
- Pay off your outstanding debts
Basically, outstanding debts have a huge impact on your credit record, so, it’s advisable to pay off as many as you can. Also, start with credit card account as they have the highest interest rates.
- Reduce your credit Ratio
The difference between the amount you owe and your limit affects your credit record. Which is known as your credit utilization ratio. For instance, assuming your available credit is R20 000 and you owe R10 000, you utilization rate is 50%.However, it is advisable to keep your credit utilization ratio at 30% or lower.
- Settle and close accounts
In South Africa, it is advisable you close accounts after you have settled them, to reduce the number of credit accounts attached to your name. Note that, having too many accounts opened will negatively impact your credit score, which signifies a high borrowing amount of borrowing.
- Restrain from using credit
Naturally, you should show restraint when using available credit while you take the necessary steps to improve your credit record. Avoid taking on new debt and opening new accounts.
· Advise your spouse to take the same measure
It is important to note that, 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.
