Credit providers use your credit score to measure their risk in taking you on as a client before they approve or decline your application for credit, or for an increase in your credit limit.<\/p>\n\n\n\n
Your credit score is calculated by a credit bureau and while it is based on your credit report, it also takes account of how you pay your bills, how much debt you have and \u2013 importantly – how all of that compares to other credit active consumers.<\/p>\n\n\n\n
Your credit score is not an endorsement or a criticism of you or your credit behaviour. It will also not determine whether you qualify for credit. That will depend on the credit provider\u2019s own credit granting criteria \u2013 their own way of scoring their assessment of your risk.<\/p>\n\n\n\n
\u201cYour credit score does, however, give credit providers a quick and easy overview of your general credit behaviour. So if you take the time to get hold of your credit score, it will give you an indication of whether a credit provider is likely to regard you as a poor or excellent credit risk at that point in time, as well as areas that you may need to improve if you want to qualify for credit.\u201d<\/p>\n\n\n\n
If you are unhappy with your credit score, you need to consider the following important factors that might be negatively affecting it \u2013 and what you can do to change that.<\/p>\n\n\n\n
1. Account payment history \u2013 how you manage your accounts and whether you do or do not pay the entire instalment amount on time every month.<\/p>\n\n\n\n
What to do: look at your credit report. You will see which accounts you have not been paying as you should. Then ensure you pay the full instalment owing on each of your accounts on time, every month.<\/p>\n\n\n\n
2. Too much debt \u2013 how much you owe and how much of your available credit you\u2019re using.<\/p>\n\n\n\n
What to do: try to keep your utilisation of your current credit facilities to less than 35 percent of your limit. For example, if you have a credit card or a store account with a limit of R1 000, try to maintain the amount owing balance at under R350.<\/p>\n\n\n\n
3. Negative information \u2013 publicly available information in your credit record, such as judgements or administration orders issued by a courts which indicate that you were unable to meet all your debt obligations.<\/p>\n\n\n\n
What to do: Check your credit report for all negative information; and take active steps to pay all your outstanding debts in full so that this information can be removed from your credit report.<\/p>\n\n\n\n
4. Length of credit history \u2013 how long each of your accounts has been open.<\/p>\n\n\n\n
What to do: maintain a healthy mix of credit (e.g. store accounts, credit cards, home loan, service contracts such as cell phone accounts and so on) in order to establish a strong credit history.<\/p>\n\n\n\n
5. Account application and enquiry activity \u2013 within a short period of time, how many account applications you submitted and how many new accounts you opened.<\/p>\n\n\n\n
What to do: try not to shop around too much for credit at the same time. Too many simultaneous applications could indicate that there has been a significant change in your financial circumstances.<\/p>\n\n\n\n
Finally, check your credit report \u2013 and your credit score \u2013 regularly. Look for anything that does not seem right and contact the credit bureau to dispute any inaccuracies. This will potentially safeguard you from identity theft, as well as guide you to paint yourself in the best possible light in the eyes of the credit provider.<\/p>\n","protected":false},"excerpt":{"rendered":"
Credit providers use your credit score to measure their risk in taking you on as a client before they approve or decline your application for credit, or for an increase in your credit limit. Your credit score is calculated by a credit bureau and while it is based on your […]<\/p>\n","protected":false},"author":1,"featured_media":43,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-60","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personalfinance"],"_links":{"self":[{"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/posts\/60","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/comments?post=60"}],"version-history":[{"count":2,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/posts\/60\/revisions"}],"predecessor-version":[{"id":68,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/posts\/60\/revisions\/68"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/media\/43"}],"wp:attachment":[{"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/media?parent=60"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/categories?post=60"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crunch.africa\/blog\/wp-json\/wp\/v2\/tags?post=60"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}