How to Improve my Credit Score? – A Simple Guide
How to Improve my Credit Score? – A Simple Guide
In a world where your financial reputation follows you everywhere, your credit score can open various opportunities for you. Whether you’re applying for a car loan, renting a flat, or even opening a clothing account, your score matters. The good news? If you’ve ever asked yourself the question: “how to improve my credit score”, this article is for you. Let’s break down the ‘why’ and ‘how’ with practical, South African context and user-friendly insights.
"You need at least six months of credit activity before a score may be generated, per credit bureau standards."
Whether you’re dreaming of owning a home, driving a new car, or securing better loan terms, mastering how to build a credit score in South Africa is a must.
Why Your Credit Score Matters More Than You Think
Your credit score reflects how well you manage your money. In South Africa, it’s usually calculated on a scale from 0 to 999. The higher the score, the better your chances of approval for loans, credit cards, and other financial products.
Based on insights from our data partner VeriCred Credit Bureau (VCCB), the following score ranges offer a useful reference point to measure how your credit profile may impact your credit approval odds:
- Excellent/Very Good: 901 – 999 / 1 000
- Good: 876 – 900
- Okay/Average: 851 – 875
- Fair/Poor: 751 – 850
- Bad: 601 – 750
- Very Bad: 3 – 600
- No Score: 1–2 (insufficient data available to generate a credit rating)
But why does your score matter?
- A good credit score can help to get lower interest rates, meaning you pay less over time.
- Landlords, banks, and even employers sometimes consider your credit profile to get the approvals that you need or applied for.
- Concerningly, the National Credit Regulator (NCR) reports that over 10 million South Africans are classified as having impaired credit records; nearly half of the tracked number of credit-active consumers on record with credit bureaus and/or credit providers.
- Knowing how to improve my credit score could mean the difference between credit approval or rejection, especially, in our tight South African economy.
What Are the Key Factors That Affect Your Credit Score?
Understanding what influences your score is the first step to improving it. Here’s what to know:
- Payment History: Missed or late payments lower your score.
- High Account Balances: Owing more than 35% of your available limit can negatively affect your credit utilisation ratio.
- Too Many Credit Inquiries: Applying for too much credit in a short time raises red flags.
- Public Records: Defaults or judgments can severely damage your score.
- Accounts in Good Standing: Well-maintained credit accounts build positive history.
- Credit Limits versus Debt: Even unused credit can impact your profile.
- Debt Review: This NCR-regulated solution helps rehabilitate you when overindebted, but adds a temporary flag to your profile.
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Top Tips: How to Improve My Credit Score in South Africa
Improving your credit score isn’t a once-off or quick fix. It is a series of smart, consistent habits. Here’s how you can start getting momentum:
1. Pay On Time, Every Time
Set up automatic payments or reminders to avoid missing due dates.
Did you know? Six months of on-time payments can noticeably boost your score.
2. Lower Your Credit Usage
Try to use less than 30% of your available credit.
Example: If your limit is R10 000, try not to owe more than R3 000.
3. Space Out New Credit Applications
Every application results in a “hard inquiry” and too many inquiries can hurt your score.
Handy tip: Apply only when you need to, and ensure you do your homework before trying to apply for credit.
4. Fix Errors on Your Credit Report
Regularly check your credit report for inaccuracies. You’re entitled to one free report annually from any reputable credit bureau and, here comes the bonus, if you sign up for via ThreeSixty.me, you can download your report for FREE, always and at any time.
5. Build Credit with Smaller Accounts
No credit history yet? Don’t be discouraged, start small with a store card or starter loan.
Reality: Responsible repayments on small accounts = better future approval odds.
Bonus Tip: Rebuilding After Debt Review
If you are currently or have previously been placed under debt review:
- It’s a responsible and regulated process when you’re over-indebted.
- You can’t take on new debt while being flagged as being under the debt review. But, you can improve your credit score after you complete the process and gradually get yourself back onto a new credit journey
- If you can prove to the courts that you are no longer over-indebted, however, for example via a legitimate debt review removal process, you can also slowly but surely improve your credit score.
- Get into contact with your debt counsellor and see when the status can be removed from your profile.
Guess what? Improving your score after debt review takes time, but it is absolutely achievable with support from platforms like ThreeSixty.me
Let ThreeSixty.me Help You Along Your Credit Journey
Our handy ThreeSixty.me platform helps you stay in control of your financial health. Here’s what you get:
- Free, ongoing access to your credit score.
- Insights on what affects your score.
- Tools to track improvements over time.
- No guesswork; just financial clarity.
Don’t guess – know & build your credit score today.
Final Thoughts: Financial Freedom Starts with One Step
Improving your credit score isn’t just about better loan approvals, it’s about building confidence and taking control of your financial life. From understanding what impacts your score to adopting smart repayment habits, you’re already on the right path by asking, “how to improve my credit score?”
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Your friendly neighbourhood Credit Scoring App.
About ThreeSixty.me
ThreeSixty.me is your go-to platform for mastering your financial future. Whether you’re tracking your credit score, improving your financial health, or unlocking better opportunities, we provide the tools and insights to help you stay in control.
Sign up today and take charge of your credit journey!
