Having a good credit score should be important to all South Africans. This 3-digit number increases the chances of being approved for beneficial financial products - home loans, payday loans, credit cards - and inevitably plays a big role in planning and executing one's financial life and future prospects.
This score is used by creditors and lenders, such as Mpowa Finance, to easily and accurately determine your financial track record, including repayment history and whether debts were paid in full and on time. Even prospective employers rely on it. The higher the score, the more likely the approval process for that loan or credit card.
Why Many South Africans Have Low Credit Scores
There are many South Africans that are not happy with their credit score, for whatever the case, and therefore are missing out on opportunities to better their lives. Improving your credit score is not impossible, but it does take some time. There is no time like the present to get started.
Five Actions That Will Improve Your Credit Score Over Time
1. Get Organised
Don't forget to pay your bills. Rather set up direct debits to pay your expenses and leave it to the banks. Consistent, on-time payments are the foundation of a healthy credit profile.
2. Resist Overspending on Credit
Keep your balances low on credit cards. You don't have to spend everything available to you. High card utilisation shows lenders you cannot manage your credit sensibly.
3. Keep Up with Repayments
Ensure when paying back debt that payment instalments are done in full and on time. Usually there is a minimum amount required on your accounts, and paying less will negatively affect your credit score.
4. Double-Check Your Details
It's important to make sure your details are up to date and fix any mistakes such as name typos, as this could negatively affect your scores.
5. Plan Ahead
Try not to open too many accounts in a short period of time. Having too many enquiries into your credit as a result of excessive credit applications is also not a good thing. Planning in advance allows you to get your credit score in check before applying.
Monitor Your Credit Regularly
Check your credit scores and reports regularly. Stay informed about actions that increase and lower your scores. Identity theft and fraud is a sad reality faced by millions of South Africans. Knowing your score and striving to maintain or improve it is the responsible thing to do for your future.
If you have never had a credit check done before, Mpowa Finance does a free check when you apply for an online loan.
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