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.

Check for arrears accounts

In order to help you on your way to Credit Health, we've teamed up with Transaction Capital Recoveries and MBD Inc. By selecting continue, you give consent that we may check for any arrear accounts on your behalf.

Check for arrears accounts

In order to help you on your way to Credit Health, we've teamed up with Transaction Capital Recoveries and MBD Inc. By selecting continue, you give consent that we may check for any arrear accounts on your behalf.