Your credit score is a number that summarises how you have handled credit, and it quietly decides whether you are approved and what rate you are offered. Most people first encounter it when it costs them something. It is worth understanding before then.
Who holds it
South Africa has several registered credit bureaux, and they do not all hold identical information — a lender may check one and see something another does not have. Each is required to give you one free credit report a year, and you should use that entitlement.
Getting your report costs nothing and takes minutes. It is the single most useful thing you can do before applying for credit.
What goes into it
- Payment history. Whether you paid on time, and how late you were when you did not. This carries the most weight, by a distance.
- How much of your available credit you are using. A credit card sitting at its limit reads worse than the same card at a third of its limit, even if you always pay.
- How long your accounts have been open. A long, boring, well-run account is an asset. Closing your oldest account can lower your score.
- Recent applications. Every application is recorded. A cluster in a short period reads as distress.
- Public record entries. Defaults, judgments and administration orders sit on your record for years and weigh heavily.
Read your report for errors first
Before you try to improve anything, check whether what is recorded is even correct. Common problems:
- An account you settled that still shows a balance or a default.
- An account that is not yours, sometimes from a name mix-up, sometimes from identity fraud.
- A default recorded without the notice you were entitled to receive.
- A judgment that was rescinded but never removed.
You have the right to dispute any of it, free of charge. The bureau must investigate and either substantiate the entry or remove it, generally within 20 business days. Keep proof of payment for anything you settle — a settlement letter is worth more later than it seems at the time.
What actually moves the number
- Pay on time, without exception. Set up debit orders for the minimum on everything, then pay extra manually. A payment that is late by a day still counts as late.
- Bring revolving balances down. Paying a credit card down from its limit to well below it improves your position faster than almost anything else available to you.
- Leave old accounts open. Even one you rarely use contributes length and available credit. Closing it can hurt twice.
- Space out applications. If you are shopping around, do it in a tight window or through a service that matches one application to several providers, rather than applying separately over months.
- Give it time. Negative entries fade in influence as they age, and there is no legitimate service that can remove accurate information early. Anyone promising to “clear” your record for a fee is selling you something that does not exist.
A realistic timeline
Correcting a bureau error can show up within a month. Bringing down a high card balance shows up within a billing cycle or two. Rebuilding after a default takes a year or more of consistent payments — the entry stays, but its weight falls as recent good behaviour accumulates.
Nobody rebuilds a credit record in a week, and any offer that claims otherwise is worth walking away from.
A low score is not a life sentence
Plenty of credit providers work with applicants who have imperfect records — usually at a higher rate, which is what the rate is for. If your score is poor, the productive approach is to be realistic about the rate you will be offered, borrow the smallest amount that solves your problem, and use repaying it as the thing that rebuilds your record.