How to get your credit health back on track

For most South Africans, having a healthy relationship with credit facilities can be a bit challenging. So, you may be wondering how can you get your credit health back on track – especially after such a trying year.  

A plan to improve your total credit health is something often overlooked. And often, it’s as simple as people not even knowing how you can get access to your credit report online in South Africa.  

According to the Financial Services Boardthe local average financial literacy rate is currently sitting at 51%. This means a large portion of South Africans need assistance with financial education. The average credit score in South Africa ranges around 560. This is a sure indicator that we are in serious need of education to improve our credit score and total credit health.  

We may think we fit into the money-savvy category, but many of us still struggle with the basics; from understanding APRs (Annual Percentage Rates) to figuring out what a good credit score in South Africa actually is. 

Our credit score rating, particularly, lies at the heart of our national debt problem – and our financial literacy issues. There is a huge reliance on financial products, like loans and credit cards, in South Africa. People apply for products without considering how this will affect their credit score rating.  

 “Why do I have a bad credit score?”  “How can I improve my credit score in South Africa?” “How do I check my credit score?” These are common questions (*facepalm*) we encounter when trying to navigate our way around credit score education.   

Any of the small financial decisions you make where credit is used, will impact your future borrowing potential. It isn’t until your mortgage application is turned down or you can’t take out a cellphone contract, that you feel the real-world effect of a damaged credit score.  

Let’s dive deep and fully grasp what a credit score is and how to manage it responsibly.  

What is a credit score? 

First off, we need to understand the basics of a credit score. Any South African who has ever used credit will have a credit score. Credit can be anything like a short-term loan, a store card (i.e. Woolworths or TFG card) or car financing. 

When you apply for a new credit product, your potential lender will do a credit report check to find out whether or not you are likely to use their product responsibly (i.e. repay your debt on time). 

When you get your credit report in South Africa, you’ll see the score can range from 330 to 850. Higher credit scores identify the more responsible borrowers, and lower scores suggest less responsible borrowers. But what exactly is a good credit score in South Africa in 2021.  

In the eyes of most creditors, scores are loosely viewed like this: 

  • 800+ – Exceptional 
  • 740 to 799 – Excellent 
  • 670 to 739 – Very Good 
  • 580 to 669 – Good 
  • 579 & below – Poor 

Many things can contribute to your credit score report positively and negatively. “Black marks” against your name such as missed payments, late payments, and other repayment issues will send your credit score plummeting. In the old days you might have been blacklisted, but this article explains why that doesn’t happen anymore. Keeping in mind the credit score categories above, you can see that it might be a challenge to increase your credit score by as much as 100 points. And, even more so to reach an excellent credit score of over 800.    

But, with the help of the 5 steps below, you will quickly learn how you can better your credit score.  

Why is my credit score important? 

When you get your free credit report online, you might experience a sigh of relief to see a ‘good credit rating’.  A good credit score will have positive differences in your life practically and financially. A good credit score in South Africa will mean you are likely to be approved for most basic financial products. Although, you may not have access to special rates and high-level products (you’ll need a very good or excellent credit score for this). 

By contrast, a poor or very poor credit score will make it much more difficult to access credit products such as loans and mortgages. From putting your life plans on hold (e.g. financing your furthered studies) or your mortgage becoming much more expensive – a less than perfect credit score can be a financial burden. 

bad credit score in South Africa has a few disadvantages, most importantly struggling to get a loan approved. A low credit score means you will face restrictions on the conditions of the loan. So, it’s best to find out what loans you can actually qualify for with bad credit.  

How to get a good credit score 

You may be asking yourself, “How do I get a good credit score and how can I maintain it?” Below you’ll find 5 helpful tips you might want to consider to improve your credit health and achieve the best credit score to help your financial needs.  

Ready to realistically improve your score in 30 days – at least by some measure?  

*FYI if you’ve done a credit score check and it’s very low, it can take a long time to repair the damage and restore your record to a credit health level lenders feel comfortable with. 

1. Credit score education 

Knowledge is power, and knowing what your credit score actually is, is the first step. Even if the news isn’t great, knowing gives you the power to improve it – or maintain it. Companies like Experian, Transunion, and Compuscan offer free annual credit checks (just watch out for sneaky extra charges). 

Alternatively, if you want to check your credit score online in South Africa, you can just use our free credit score tool here: myFincheck Free Credit Score. – myFincheck is quick and simple and you’ll get your free credit report in just a few minutes (faster than brewing your coffee)  

2. Get your OWN credit score 

It’s best to leave relationships out the picture when it comes to credit score, especially if you are both coming from different credit histories. If you combine your not-so-ideal finances it can be big trouble for your credit score – especially if your joint finances take a turn for the worse. 

3. Don’t max out your credit 

If you’re using a financial product, like a credit card, don’t push it to the limit each month. Many people wonder why their credit score will suddenly drop and this is one of the main reasons. Maybe you got swept away by Black Friday deals or Christmas shopping, but don’t max out your credit card. When lenders see a sudden high credit use, they’ll see this as a sign of reckless spending or unbalanced finances. Try to use less than 75% to make your credit use appear more measured and responsible. In turn, this will give you a more favourable credit score rating.  

4. Stability is key 

A globetrotting, risk-taking existence may sound exciting, but it can have a negative impact if you want to improve your credit score. For lenders, regular changes of address and job changes are indicators of instability, all of which can affect your credit rating. 

5. Timely bill payments 

The best strategy to improve your credit score is to pay back the money – on time! Late payments can really leave a mark on your credit report, so if this has happened within 30 days, you’d better call up the lender. This step is probably the most influential on your credit report, and it will take the least amount of time.  

If your credit health has taken a serious knock and you want to improve your credit score, you can read this article on how to fix your credit score in 6 months at most. 


Article at a glance

5 proven steps to help get your credit health, score, and record back on track so you easily qualify for important financial products.

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