Credit Score

1. Clear your debt – The first step to fixing your credit record is to not make any more debt for the time being until your credit record has improved. You should also stay clear of making any credit enquiries, such as applying for a new credit card, as this can have a negative impact on your score.
2. Review your credit report – You can get your free yearly credit history report from one of the registered credit bureaus to check which of your accounts are likely to cause your credit record to look bad. Start paying these accounts first and also focus on accounts with very high-interest rates. The sooner you pay it off, the sooner you can have a good credit record.
3. Make payments on time – The most important thing to remember is to keep making payments and communicate with your creditors. Try to pay a little bit more than the minimum installment every month and be sure to snowball the money from other paid-off debts as you go. If your situation is overwhelming, you can approach a debt counsellor to guide you.
4. Keep old accounts open – Don’t close your existing accounts once it’s paid off as it can increase your credit utilization ratio and lower your available credit. This can lose you some points on your credit score. Improving your credit score can take several months before you see a noticeable difference. However, it is a good goal to have and the sooner you start, the sooner you will see results.

Source: Standard Bank

650 or higher

It’s recommended you have a credit score of 650 or higher when you apply. If your score is below 650, lenders either won’t be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.

670+ = excellent
650 – 669 = good
634 – 649 = average
618 – 633 = below average
Below 618 = very poor

Consult a Bond Originator for more clarity and advice.