Understanding a credit report in South Africa.
Credit reports in a South African context.
It is not enough to just get your credit report. You need to make sure you understand it and can use it appropriately. Don't underestimate the importance of your credit report. It is what lenders and companies will check when it comes to making important decisions about lending you money or extending credit lines to you.
Employers also check credit reports before hiring candidates. Never forget that this is the only way they can really determine if there are any discrepancies or if you have fallen into financial trouble.
How is a credit score created in South Africa?
Every month, credit providers send information about the status of your accounts to credit bureaus who collate all the information from all the credit providers you have accounts with into one big report. Credit Bureaus each use their own proprietary mathematical forumale to calculate your credit score. Things like late or missed payments and unsecured (credit cards, personal loans) vs secured credit (homeloan, vehicle finance) can all affect your credit score.
The importance of a good credit score in South Africa.
Having a high credit score might help you to get a lower interest rate on your mortgage or car loan. A credit report with negative listings such as defaults and judgments, as well as too many enquiries for loans or credit over a short period of time, could result in a low credit score, which could translate into a higher interest rate or declined loan.
Who looks at my credit report, and why?
When you’re applying for creditlenders will ask for your permission to check your credit history. You can also purchase a credit report from Credit Health whenever needed to ensure the information in the report is accurate.
Understanding what is on your credit report is crucial to having a good credit score. At the same time, there are many other factors that should be considered. For example, you should ask yourself if you are applying for credit for the right reason. Maybe there is a better way to address your short-term financial needs. Or perhaps you should consider long-term planning to avoid falling into debt. Visit our website or get in touch with Credit Health for guidance on how to improve your credit score.
Understanding what is on your credit report is crucial to having a good credit score.