12 Sep Credit Score Myths South Africans Still Believe

Gain a clear understanding of your finances by clearing the air around some common credit score misconceptions. It is hard to find an adult today who has not utilised credit at some point in their lives. In fact, the only way to establish creditworthiness is by accessing credit. If you pay your monthly instalments without fault, your credit score improves, and you can access larger loan amounts for important purchases.

So, what are some credit score myths South Africans still believe? Let us take a closer look at some commonly misunderstood information around credit scores:

Checking your Credit Score Will Harm your Credit

Many people refrain from checking their credit reports because they believe it will impact their credit scores. This is not true. When you access your own credit report through a credit bureau or through our FREE CREDIT CHECK, this is a soft inquiry that will not lower your credit score. It is actually important to check your credit score from time to time, especially if you are trying to improve it.

Debt Review Permanently Ruins your Credit Score

There are plenty of negative myths surrounding debt review. One is that debt review will leave a permanent mark on your credit report, and affect your credit score permanently. The truth is that the debt review flag only shows on your credit report while you undergo the process. Once you have repaid all your debts through debt review and received your clearance certificate, credit bureaus must remove the flag, and you can start to rebuild your credit score.

Closing Old Accounts Improves your Credit Score

We often explain to our clients the importance of keeping their old accounts open, which comes as a surprise to many. The truth is that when you close old or unused accounts, this shortens your credit history and can lower your credit score. This is because the length of your credit history is a factor that contributes to your credit score.

Credit Scores Stay the Same for Extended Periods

Do you know how often your credit score updates and what affects it? People often assume that their credit score does not update regularly, and only changing a few times a year. In actuality, your credit score updates every 30 to 45 days, as new information becomes available to credit bureaus from credit-reporting agencies. Applying for credit, your payment history, how you utilise credit, and judgments or listings can all affect your score.

If you’re working towards debt clearance or improving your credit score, it is important to separate fact from fiction. The more you understand, the clearer your path to financial freedom becomes. CONTACT US for assistance in restoring your credit.