your credit score

 

What influences your credit score?

After a life of going to school and the care free environment of your student years, you start your first job, working hard to get by. During these first years of working you become aware of this thing called “credit” and that is where it all starts. Your credit score is always busy calculating and from your first credit application it starts evaluating you. Every time you pay your credit on time it starts adding up, also, every time you pay late it subtracts and by not paying at all it starts going into the red.

So the higher your score the better the risk for credit providers and lenders, this signals to them that there is a good chance that your credit instalments will be settled without any issues.

A poor or low credit score indicates that the borrower has had issues settling credit or debt in the past and will possibly do the same in the future, thus reducing your chance of getting an approval or if you do get an approval, it will be with a not so favourable interest rate or term.

 

Understand your credit score

Most of us think that your credit score is only available to banks, lenders and people providing credit, but that is not so. Anytime that you want to check your credit rating you can check it online at  any one of South Africa’s credit bureaus. You have an option to either sign up and pay a small fee and get it immediately or on a monthly basis, or once a year you can get a free credit report from any one of the credit bureaus. Credit scoring can be complicated, but it doesn’t have to be, what you need to understand, is that every payment or no payment that you make will reflect. Learning to be responsible with your credit score can set you up to reach your goals.

 

Some Factors that affect your credit score:

  • Payment history, (good payments, late payments, no payments, judgements)
  • Length of your credit history,
  • New credit or accounts,
  • Accounts in use,
  • new inquiries.