How is your credit score calculated?

Being honest about your accounts will help establish a baseline that you can build upon with future accounts and loans

What goes into calculating your credit score?

A credit report is like a filing cabinet. It briefly describes how you've handled your accounts and outlines any mistakes that may have occurred over the years. How exactly is your credit score calculated?

Being honest about your accounts will help establish a baseline that you can build upon with future accounts and loans.. It is important to handle your finances with care and according to the stipulations of your contract.

How is a credit report calculated?

Your credit score is calculated using a formula that evaluates how well or badly you pay your bills, how much debt you carry and how it stacks up against other borrowers. In effect, it tells you in a single number what your credit report says about your management of existing credit.

Credit report ratings.

A credit report rating gives your potential lender a summarised rating of risk. This risk level is directly linked to your credit history and financial behaviours. Your credit score is most often calculated in terms of risk as below. Please note: these ratios may differ from credit bureau to credit bureau, dependent on the credit score calculation method they use:

  • 650 to 999 is minimum risk
  • 620 to 649 is low risk
  • 600 to 619 is average risk
  • 581 to 599 is high risk
  • 1 to 580 is very high risk

What determines a credit score?

As you start dealing with banks, retailers, and other financial institutions like lenders, you begin building a financial history. Your credit history will be determined by the way in which you've worked with money over time, whether it's borrowing large amounts or small amounts and whether or not you are repaying the debt or missing payments.

What determines a credit score?

  • Missing payments or not paying on time
  • Too much debt
  • Blacklisting
  • Length of credit history
  • Account application and enquiry activity

In short, credit scores are a numerical representation of a person’s creditworthiness. They are calculated using a proprietary formula that takes many different factors into account. There are several factors affecting your credit score, but in general, a higher score indicates a greater ability to repay debts.

This risk level is directly linked to your credit history, and financial behaviours.

  • 10 common credit score myths.
  • 5 ways to pay your credit card debt.
  • 8 most common credit terms.
  • A Guide On How To Get Out Of Debt.
  • Blacklisting, is it still a thing?
  • Breaking Bad Debt.
  • Build Your Credit Score While You’re Young
  • Can I Get A Loan While Under Debt Review?
  • Can Your Credit Score Affect Your Job?
  • Check Your Credit Report For Signs Of Fraud
  • Common myths about debt review.
  • Debt Management Tips.
  • Debt Review Is A Good Idea.
  • Default, Judgement, Sequestration.
  • Disputing Errors on Credit Reports
  • Free VS Paid Credit Reports.
  • Frequently Asked Questions about Debt Review.
  • Get your credit report before applying for a loan.
  • Get Your Credit Score Back On Track
  • Good Debt Can Build Your Credit Score.
  • Hard VS Soft Inquiries On Your Credit Report.
  • Have I Been Blacklisted?
  • How do I get late payment entries removed?
  • How Do I Manage My Debt When I Am Unemployed?
  • How do I read my credit report?
  • How is your credit score calculated?
  • How Is Your Credit Score Weighted?
  • How Long Does Debt Review Last?
  • How To Calculate Your Debt-To-Income Ratio.
  • How To Clear Your Name At Credit Bureaus.
  • How To Improve Your Credit Score After Debt Review.
  • How To Qualify For New Credit With No Credit Score.
  • How To Reduce And Eliminate Debt.
  • Judgements, Administrations and Listings
  • Online Shopping – Just (don't) add to cart!
  • Teaching Children Good Money Sense.
  • The Best Way to Manage your Store Credit Card Account
  • The Pros And Cons Of Debt Counseling.
  • Things You Don't Want To See On Your Credit Report.
  • Tricks To Help You Save While Paying Off Debt
  • Understanding a credit report in South Africa.
  • Understanding Debt Consolidation Loans in South Africa
  • Vehicle instalments driving you to despair
  • Warning Signs You Could Be Heading for Financial Disaster
  • What Affects Your Credit Score?
  • What are credit bureaus and how do they work?
  • What causes credit card debt?
  • What do credit bureaus know about me?
  • What Effect Does Your Credit Report Have On Your Interest Rates?
  • What Happens To Your Credit When You Get Married?
  • What Happens When I Skip A Debt Payment?
  • What Happens When You're Debt Free?
  • What is a credit score?
  • What is a credit utilization rate?
  • What Is A Decent Credit Score To Buy A Car?
  • What Is A Good Credit Score If You Want To Buy A House?
  • What Is A Hard Inquiry And How Does It Affect Your Credit Report?
  • What Is A Soft Inquiry And How Does It Affect Your Credit Report?
  • What Is Considered A Bad Credit Score?
  • What is considered a good credit score?
  • What Is Debt Administration?
  • What Is Debt Counseling?
  • What Is Debt Review?
  • What’s the difference between your credit score and your credit report?
  • Which Type Of Credit Carries The Most Risk?
  • Why Debt Counseling Is Perfect For You.
  • Why Did My Credit Score Go Down?
  • Will checking my credit report affect my credit score?
  • Your Best Defence Against Identity Theft Is Your Credit Report
  • Your Credit Score: The Basics.
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