14 Oct What You Can Do with a Credit Score of 600

Have you ever wondered what you can do with a credit score of 600? 600 is a fair credit score: you’re not high risk, but you’re not the model consumer. You’ll qualify for loans, but probably with stricter lending requirements than someone with an excellent credit score. Most South Africans have a credit score of 600, or just over.

Celebrate if your score is in the 600 range! It means that your credit is standard and that you’re on your way to getting personalised credit and loan offers.

Let’s discuss everything you can do with a credit score of 600, its credit score meaning, the loan terms you’ll be offered and what consumer credit products you can purchase.

Credit You Can Take out with a Credit Score of 600

With a credit score of 600, you can take out beginner-friendly credit like secured credit cards, store cards/retail credit cards, personal loans, and secured loans.

Secured Credit Cards

Firstly, secured credit cards are credit cards with virtually no risk to your lender. When you apply for one of these, the deposit you put down becomes your credit limit. This way, in the event of your default, the bank can completely recover its losses.

This credit card will be revolving credit–once you pay back what you’ve spent, that amount becomes available to spend again.

Interestingly, if you maintain a low credit utilisation rate (the amount of credit you spend in comparison to your total limit), this card can be fantastic for building credit. Let’s say you put down a deposit of R10 000 and spend R3 000 or less every month. Your credit utilisation rate will be 30%, the ideal rate for building healthy credit habits.

Store Cards

Next, store cards, also called retail credit cards, are a sort of revolving credit issued by consumer goods stores. This allows you to buy their products on credit; “buy now, pay later”.

These cards are good for building credit, provided you pay off your balance on time. Otherwise, you face high late charges and more interest. Be careful with store cards, their interest rates can be very high and compound quickly.

Some examples of store cards you can get easily are those of Truworths, Jet, Cotton On, and Woolworths.

Personal and Secured Loans

Personal loans are a sort of instalment credit. This means you pay off your credit in instalments over an agreed period. Some examples of personal loans are car finance, home renovation loans, and business loans.

Often, personal loans require collateral (an asset you say the bank can seize should you default) and so are called secured loans. Since your credit score isn’t high, the amount you can borrow might not be as high as you would like. Your interest rate might be higher than prime, too.

Moreover, loan terms (like interest rate and how long you have to pay it off) are dependent on your credit history. If you have a long history with credit, diverse lines of credit, and have paid your balances on time and in full, you’re more likely to secure better terms.

If you would like to get a free online credit check or improve your credit score, contact Credit Boost. We’re experts at helping South Africans get access to better credit, better scores, and optimal financial well-being.