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What is a Good Credit Rating in South Africa?

Two hands holding a white tablet that displays a credit score of 810

Your credit score has significant importance. 

It is a three-digit number which determines your financial health and helps lenders decide whether you are a good candidate for credit applications. The higher your score, the better.

There are a few factors that influence your credit score. 

They are:  

  • Your history of debt repayments.
  • The amount you owe.
  • How often you apply for credit and the type of credit you apply for. 
  • How long your accounts have been open.
  • How you are you using your available credit 
  • Whether you have ever filed for bankruptcy or have had a judgement against you.

 

What is a good credit score in South Africa?

Your credit score can range between 0 to 999. In South Africa, a credit score over 700 is considered to be quite strong. A score over 670 is considered decent.

If you are sitting in the lower brackets, do not fret, there are ways for South Africans to build a strong credit score.

When you think about your credit score, you want to aim for Test match cricket batting scores. The likes of Jacques Kallis.

Here’s a breakdown of credit score ranges in South Africa.

 

Credit score rating ranges:

Score Rating What does it mean?

Under 300

No credit history

Lucky you. A clean slate. Start a credit profile but arm yourself with information about healthy financial habits.

300 - 579

Poor

If you are sitting here, it is usually as a result of bankruptcy or bad payment habits. Remember, there are ways to improve your score. A good idea is to start by looking at ways to manage your finances better.

580 - 669

Fair

Fair

670 - 739

Good

A ‘good’ score can help you attain credit with fair interest rates rather easily. It may however limit the type of credit you are eligible for.

740 - 799

Very good

This is a very comfortable credit rating range to be in. Lenders welcome individuals such as yourself to apply for credit. Your score is indicative of a solid payment history and financial responsibility.

800 - 850

Excellent

You are a stellar example of someone who is financially sound and has an impeccable payment history. This category comes with the perk of relatively low-interest rates.

How do you know what your credit score is?

Simply use an online credit report service to find out what your credit score is. There are several popular services that track and provide free credit reports to South Africans. Here are a few of the most popular services that provide credit checks:

  • Clearcore
  • Experian
  • TransUnion
  • My Credit Check

 

 Maya Angelou said ‘ When you know better, you do better.’

Once you know what your score is, you can start taking the steps to improve it if necessary or proceed with applying for the credit you require.

Check to see if you qualify to reduce your debt instalment with our quick quiz

Why does your credit rating matter?

Your credit score is the number lenders look to, to determine whether you are financially viable. A low credit score can hurt your chances of getting approved for a loan, or can be the difference between low- and high interest rates.

This means that a bad credit score could prevent you from getting the house you want, securing your dream car or getting the loan you need to fix the leaking ceiling before the rain comes. Your credit score matters.

 

What is a good credit score to buy a car?

Anything above a credit score of 580 will be considered for vehicle finance. As always, the higher, the better. It is highly unlikely that any dealership will want to enter into a financial contract with you, if your credit score is less than 579. 

Loans are negotiated on its individual merits and your credit score is not the only criteria that will affect your loan, but a good credit score can only work in your favour. 

 

What is a good credit score to buy a house?

A credit score that is higher than 630 will give you a fair chance of getting approved for a home loan, while a credit rating that is 670+ is considered an ideal credit score to buy a house. The higher your credit score, the better your home loan terms will be, so aim for a credit score of 740+ if you can.

You can check your score to start working on improving your score. The higher your score, the lesser of a risk you are to the lender, and the better your chances of getting your loan approved. 

 

How to improve your credit rating:

Start with arming yourself with knowledge. Know your score and then take the necessary action: 

  • Be consistent with your payments, and pay on time.
  • Say NO to any further debt. Focus on eliminating your current debt instead. 
  • Try to pay more than the minimal amount to get rid of debt faster

 

Can applying for debt review help improve your credit rating? 

Yes, in fact, it can. If you’re struggling with debt that is hurting your credit rating, then you could consider starting with debt review to improve your credit score – over time, you could break-free of debt problems and build a stronger credit history.

Debt review is regarded as a positive step towards financial freedom. Once you complete your debt review process, your clearance certificate is your ticket to a clean slate, and start working on ways to build up your new and improved credit reputation and stay out of debt that could hurt your credit score again.

 

What’s your rating?

What goes up and should never come down? Yes, you got it. Your credit score. 

Now that you understand the significance of your credit score,  wouldn’t you say it’s time to get working on increasing it? 

 

Start with a consistent debt repayment strategy – try our free assessment to see if you qualify.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

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