2020 has been hard on our budgets and our pockets, and in many cases on our credit scores as well. Let us look at what we can do to nurse those scores back to health.
Before you can start improving your credit score, you have to know what it currently is. This is very easy to do. Every South African consumer is entitled to one free credit report per year. Bayport can help you get your report: simply click here to set the ball rolling.
Your credit report will tell you all you need to know about your credit health situation at the moment.
What does a credit report show?
Where does the information come from?
There are four main credit bureaus in South Africa: Experian, TransUnion, Compuscan, and XDS. Every month, credit providers – banks, cellphone companies, retail stores, property rental agencies, and so on – send transaction details to these bureaus. They then compile the information into a credit report that shows each consumer’s credit history and habits.
What is a good credit score?
Most credit bureaus rate your credit score between 300 and 850:
Each credit bureau uses its own formulas and methodologies, so your score will not be the same at all four.
A high credit score shows that you are good at managing your debt, which means you are likely to repay a new loan or honour an agreement such as a rental contract.
Why is a good credit score important?
When you apply for credit, the potential credit provider will pull a credit report from one of the four credit bureaus. If you have a healthy credit score, you stand a good chance of not only getting the loan but getting it at a lower interest rate than someone whose credit score is only fair.
Remember, however, that credit providers also look at other factors, such as your debt to income ratio. If that number is too high, in other words, if too much of your income goes towards repaying debts, the credit provider will see you as a risk.
Can I improve my credit score?
Absolutely! The credit report you get today is only a snapshot of your recent financial behaviour. This means that when you change what you do, your credit report will look different too.
How can I improve my credit score?
The short answer is that healthy money habits will improve your credit score. Here is what it means in practice:
Now is the best time to start rebuilding your credit score after the difficult year we’ve had. You can do it, all it takes is time, discipline, and healthy financial habits.https://www.bayportsa.com/products-services/credit-health/?/ Go back