How to improve your credit score

04/06/2018 00:00:00

How to improve your credit score

Have you ever applied for credit and been turned down because of a negative credit profile or because you were considered high credit risk? For many of us this often comes as quite a shock.

When was the last time you checked your credit profile?

Most South Africans are surprisingly unaware of the importance of a good credit profile, many do not know what a credit profile even is, and even if they do, they seldom check their own personal credit profile.

This is how it works:

The Credit Bureaux record all your credit applications, credit agreements, payment history and payment behaviour. Your information – both positive and negative – is stored by the various Bureaux. If you default on payments your credit profile is affected, which could make it much more difficult for you to get credit in the future. Once you’ve settled all your accounts, the negative legal information is cleared BUT the negative repayment history remains for a couple years.

Interesting fact: To get good credit, it’s better to have credit. Good credit profiles are gained when you borrow money and pay it back on time, and for the full amount.

Here’s how to keep track of your credit profile:

  • Check your credit profile for free every year through one of several Credit Bureaux such as:

TransUnion - 086 148 2482

Experian - 086 110 5665

Xpert Decision Systems (XDS) - 086 112 7334

Compuscan - 086 151 4131

 

  • If you have an unhealthy credit profile, find out why – and try to change those behaviours if possible. Was it one dramatic incident, like a foreclosure or bankruptcy? Or was the problem a series of smaller things, like late and missed payments that went on for a period of time? 

Also check to ensure all personal and account information is up to date and whether or not any accounts were opened fraudulently in your name.

How to improve your credit score

It starts by keeping outstanding balances relatively low on credit cards and other credit accounts. Only apply for and open new credit accounts when you know you can pay them back.  

If your credit history is unhealthy but you still have credit or retail accounts, settle the ones you can – but don’t close them entirely. Remember you need credit to get credit.

 It's never too late to begin working towards an improved credit profile. After all, it could be the difference between you being able to purchase your dream house, finance a vehicle, pay emergency medical expenses or further your studies one day.

What to do if you’ve been listed incorrectly

If you are listed negatively on the credit bureau you do have certain rights. You can challenge the information if you believe it is incorrect.

Step 1 – Contact the bureau in question

Step 2 – If you are not satisfied with the findings you can call the Credit Ombudsman on 0861 662 837

Step 3 – If you are still unsatisfied you can lodge a complaint to the National Credit Regulator (NCR) by calling 0860 627 627

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About African Bank

Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.