WHAT IS A CREDIT SCORE
In South Africa a credit score is a three digit number that allows various credit providers (companies that offer your credit) to assess your credit worthiness and ability to to pay back your loan. The shortest answer would be simply its a risk factor indicator. If your score is low you will most likely pay more interest and get less credit. If your credit score is high you will most likely get more credit at a reduced interest rate.
WHERE CAN I GET MY CREDIT SCORE
The easiest way to get a hold of your credit score is to apply online. Remember a credit score is different to a credit report. A persons credit report is a breakdown of a persons entire credit history and is quite detailed, the credit will also show a persons current credit score. We recommend you google the following credit agencies – XDS(https://www.xds.co.za/), Compuscan (https://www.mycreditcheck.co.za/), Transunion (https://www.transunion.co.za/) or contact your bank or request same on your banking app.
TRICKS TO INCREASE YOUR CREDIT SCORE FAST
- Use your credit card like a debt card– use it through the month then pay it back all before the 25th of each month.
- Never default on your debt– all credit is linked to your credit report, if you skip one credit provider it will have an overall impact on your credit score.
- Lower your credit utilization rate– if you cannot use R20 000.00 credit per month then lower this amount to R10 000.00 this shows you are active on your credit profile and have the funds to afford the R10 000.00 credit each month.
- Request a copy of your credit report– request an annual credit report, you get a free credit report a year, use it.
- Do not apply for to much credit– if you apply for to much credit to quickly it will reduce your credit score, do not open up 4-8 clothing accounts rather open one credit card up and use the one card to shop at various stores.
- Pay off some of your smaller debts– if you have small debts of between R1000.00 and R3000.00 pay these off as fast as possible. It shows you are financially savvy and can settle your accounts.
DANGERS TO AVOID
- Default judgements – This means you failed to pay your credit and debt collectors have obtained a court order. This negatively affects your credit score and potentially stops you from getting credit.
- Sequestration– This means you cannot afford to pay back any of your credit and thus all your assets are being taken from you to pay off all your debts. You will no longer be able to access credit and this can be for a period of 15 years and have future life long implications.
- Administration– This is similar to sequestration and default judgements to a degree, you will have an appointed administrator that will administer your estate, you will be under administration until you can prove you are able to settle the debt or have done so, you will need to apply to court to have this order taken away.
WHAT TO DO IF YOU ARE TO FAR GONE?
If you ever find yourself in a situation where you have jumped from credit provider to credit provider just to be told no one will give you a loan no matter how hard you try. Then there is still hope. In these circumstance what most likely happens is a person has created a bad reputation with all credit providers but avoiding debt collectors and not defaulting completely from their credit obligations but paying in a piecemeal fashion. This causes such damage to a persons reputation and credit score that it could take a life time to recover. It is not as extreme as the above dangers but it is almost worse as you find yourself falling into a deep dark debt pit. The best option on the market at this point in time is Debt Review – we recommend you send them an email at info@dcdebtclear.co.za- this is because it is a highly regulated industry which is governed by the National Credit Regulator in terms of the National Credit Act 34 of 2005. It will help you as you will be issued a clearance certificate at the end of the programme that essentially creates a clean slate for you. Your credit record is expunged and it is as if you were starting a new credit life without the preexisting baggage from your past.
