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D8639098

  8 months ago

What’s a good credit score and what influences it?
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Your credit score is based on how well you manage your debt and how responsible you are when it comes to repayments, including whether you consistently pay on time and pay at least the minimum instalment due.

If you have a non-existent credit score, it’s likely that a lender will decline your application for a loan/credit as they have no track record to base their risk assessment on as to whether you are a good payer or not.

It takes around 12-18 months to build up a meaningful credit record, and you’ll need some sort of retail, cellular or store credit account – either interest or non-interest bearing – to set this process in motion.

What’s a good credit score?

Credit scores are typically rated on a scale from 0-1000 as follows:

767 – 999: Excellent
681 – 766: Good
614 – 680: Favourable
583 – 613: Average
527 – 582: Below average
487 – 526: Unfavourable
0 – 486: Poor

What factors influence your credit score?

- Missing or late payments will negatively affect your credit score. Even if you double up on the instalments in the following month to catch up, the inconsistent payments will reflect. The same applies to ‘adverse legal information’ – although this information is cleared as soon as the account is settled, the negative repayment history stays on your profile for a number of years.
- Multiple credit enquiries and high credit utilisation – a sudden uptick in credit applications in a short period will red flag on your credit profile, as will a consistently high credit limit utilisation. Try and keep your usage to less than 50% and ideally at 35% of your credit limit. Balances that are always close to your limit suggests that you are living on credit to get by. Any credit enquiries will reflect for up to two years.
- If you have a number of unused credit facilities, consider closing some of them. Having a lot of unused credit could lead to a large debt balance if you decide to use all of them at once.
- A court judgment or ‘blacklisting’ will negatively impact your score.
- Duration of credit history – it takes six years to calculate your credit score, so a credit history shorter than this will bring your score down. By the same token, it means that any missed or late payments history will stick around for six years too!
- If you run into payment difficulties, be proactive and make arrangements with the credit provider. We may be living in challenging pandemic times; however, the fact remains that your debt is not going to go away. Rather proactively approach and negotiate with creditors and lenders.
- Regularly check your credit report via the various bureaus which provide a free annual credit report to consumers.
- Improvements in your credit score will usually start showing within three months of consistent behaviour and your score should updated accordingly.
- Serious credit impairments such as late payments, default judgements, insolvency and legal action can stay on your credit record for up to 10 years.

Source: Business Tech
(https://businesstech.co.za/news/business-opinion/530410/whats-a-good-credit-score-and-what-influences-it/)

Are you aware of your credit score?
Reply

M2227388d22

  8 months ago
no
0 comments

LWillers1977

  8 months ago
Yes, I check it regular.
0 comments

LWillers1977

  8 months ago
Yes
0 comments

A5004231l50

  8 months ago
Yes
0 comments

S4296373j42

  8 months ago
Yes
0 comments

S6697946q66

  8 months ago
Yes
0 comments

S1345074a13

  8 months ago
Yes
0 comments

LWillers1977

  8 months ago
Yes
0 comments

S2280547d22

  8 months ago
I have never checked my credit score
0 comments

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