11 Aug Your Credit Score 101: A Simple Breakdown
If you are a credit-active consumer, you should already be familiar with the term “credit score.” But how much do you know about this three-digit number that tells your financial story? Being a responsible adult means taking ownership of your finances. Understanding your credit score and its role is vital to maintaining good financial health and balancing your spending habits. Here are some helpful ways to boost your credit score today with your credit report.
Think of your credit report as your financial reputation. It represents your past credit habits (good and bad) and outlines all current debts that you owe. Additionally, your credit report will reflect the way you manage different types of credit. The information that displays on your credit report is intended to help lenders, banks, and (in some cases) even insurance companies to determine your creditworthiness. Take a moment to assess your credit report now—use our FREE CREDIT CHECK.
Details on your Credit Report:
Your credit score is a number linked to your name, that represents how you deal with credit. And so, if it involves your finances, it most likely counts against or towards your credit score. The details on your report include your payment history, the amount of debt you are in, the types of credit you use, and even applications made for new credit.
If you’ve landed in trouble with money before, your credit report will pull up any judgments and defaults against you. Additionally, if you are currently under debt review or have undergone sequestration, this will appear as a red flag. Be mindful of factors impacting your credit score – this can help you make positive financial choices and keep your score from dropping.
Remember that your credit utilisation ratio is also shown on your credit report, and it matters. If you use a lot of your available credit regularly, it may signal that you’re very reliant on credit. This could lead creditors to believe you are struggling to manage your finances responsibly. Lenders want to be reassured that you are not a risky borrower before approving new credit.
Credit Score Breakdown:
Since your credit score is pretty much the sum of your financial standing, you need to know what the numbers looking back at you mean. When asking what is a good credit score in South Africa? Here’s what to know:
- 781 to 850: Excellent
- 661 to 780: Good
- 610 to 660: Fair
- 500 to 609: Poor
- 300 to 499: Very Poor
So, what credit score should you try to maintain? Our Credit Boost team suggest that you keep your credit score above 600. This number is on the lower end of a good credit score, and is manageable as long as you stick to your budget and honour your debts. If your credit score dips below 600, you face higher interest rates and are more likely to be rejected for credit applications.
Struggling to better your financial situation? Gain valuable insight—here’s how to check your credit score without harming it.