Your credit score is one of the most powerful tools in your financial toolkit. Whether you’re applying for a loan, financing a car, or even just trying to get a cellphone contract, your credit score determines how easily, and affordably, you can access credit. If your credit score isn’t where you’d like it to be, or if you’re just starting to build your credit profile, don’t worry: there are clear, actionable steps you can take to improve it.
In this guide, we’ll take you through a full credit health check: how credit scores work, why they matter, how to assess your current credit position, and what you can do this year to raise your score and maintain it over time.
What is a Credit Score?
A credit score is a three-digit number that reflects your creditworthiness, essentially, how reliable you are when it comes to borrowing money and paying it back. In South Africa, credit scores typically range from 300 to 850, with a score above600being considered good and above660considered excellent.
Credit bureaus calculate your score using a number of factors, including your repayment history, how much debt you owe, the types of credit you use, and how long you’ve had credit accounts. This number is used by lenders like banks, retailers, and online loan providers such asFASTA, to determine how risky it is to lend you money, and at what cost.
Why Your Credit Score Matters
A good credit score doesn’t just help you get approved for credit, it helps you qualify for better terms. This means:
- Lower interest ratesonloansand credit cards
- Higher credit limits
- Access to premium credit products
- More negotiating power
- Faster approvals
On the flip side, a poor credit score can limit your access to credit entirely or result in higher interest rates that make borrowing more expensive over time.
Step 1: Start With a Credit Health Check
The first step to improving your score is understanding your current credit status. You’re entitled toone free credit report per yearfrom each of the major credit bureaus in South Africa,TransUnion, Experian, Compuscan, andXDS. Many fintech apps and lenders also provide access to free credit scores and tools to track your improvement.
When reviewing your credit report, check for:
- Errors in your personal information
- Accounts you don’t recognise
- Late payments or defaults
- Judgments or black listings
- Total amount of debt owed
If you spot errors, you can dispute them with the credit bureau. Correcting mistakes can sometimes improve your score immediately.
Step 2: Understand What Affects Your Score
Credit scores are calculated using several key factors:
1. Payment History (35%)
This is the most important factor. Lenders want to know if you pay your bills on time. Late payments, defaults, and judgments negatively impact your score.
2. Credit Utilisation (30%)
This is the amount of credit you use compared to your credit limit. Keeping your utilisation below30%of your available credit shows you manage debt responsibly.
3. Length of Credit History (15%)
The longer you’ve had accounts open, the better. A longer credit history gives lenders a clearer view of your behaviour over time.
4. Types of Credit (10%)
Having a mix of credit types, such as a personal loan, store card, and cellphone contract, can improve your score, as long as you manage them well.
5. New Credit Applications (10%)
Every time you apply for credit, a “hard inquiry” is made, which can temporarily lower your score. Multiple applications in a short time can look risky to lenders.
Step 3: Set a Credit Score Goal for This Year
Once you’ve reviewed your credit report and understand the factors that affect your score, set arealistic goal. For example:
- If your score is below 500, aim to reach 580 or 600 by the end of the year.
- If your score is around 600, work towards crossing the 660 threshold for better interest rates.
- If your score is above 660, focus on maintaining it by using credit wisely.
Improving your score is a gradual process, so break your goal into manageable milestones every 3 to 6 months.
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Step 4: Take Actionable Steps to Improve Your Credit Score
Here are the most effective ways to boost your score this year:
1. Pay Bills On Time, Every Time
Late or missed payments hurt your score the most. Set reminders or debit orders for all credit repayments, including personal loans, credit cards, and store accounts. Even a few late payments can have a big impact.
2. Reduce Existing Debt
If your credit utilisation is too high, focus on paying down balances. Start with the debts that have the highest interest rates first. Even small extra payments each month can help reduce your debt faster and boost your score.
3. Don’t Max Out Your Credit
Avoid using your full credit limit. For example, if your credit card limit is R10 000, try to keep your balance below R3 000. This shows lenders you’re not overly reliant on debt.
4. Don’t Apply for Too Much Credit at Once
Space out your credit applications. Too many inquiries in a short period can signal financial stress to lenders. Only apply for credit when you need it, and when you’re likely to be approved.
5. Build a Credit Mix Gradually
Lenders like to see that you can handle different types of credit responsibly. If you’ve only used one kind, like a cellphone contract, consider adding a small personal loan or store account. Products like FASTA’s online credit offeringsare ideal for building credit without overcommitting.
6. Keep Older Accounts Open
Unless they carry high fees, keep older credit accounts open. Your length of credit history matters, so closing accounts can shorten your average account age and hurt your score.
7. Dispute Errors on Your Report
Mistakes happen. If your credit report lists inaccurate defaults, incorrect balances, or accounts you never opened, contact the credit bureau to file a dispute. They are required by law to investigate and correct any verified errors.
Step 5: Use Tools Like FASTA to Help Build Credit
FASTA offers short-term credit products designed to be flexible, transparent, and helpful to South Africans looking to build or repair their credit score. Taking out a smallFASTA Cash+ loan, managing it well, and paying it back on time can positively impact your score over time.
What makes FASTA different?
- Quick, online applicationwith instant decisions
- No long-term debt trap
- Flexible repayment terms
- Credit reporting to bureaus, helping you build a positive credit history
Responsible borrowing is one of the fastest ways to show lenders that you’re a good risk, and it opens up better financial opportunities down the line.
Step 6: Monitor Your Progress
Improving your credit score doesn’t happen overnight, but with consistency, your efforts will pay off. Use free online tools and apps to track your credit score monthly, review changes to your report, and adjust your plan if needed.
Watching your score improve can be a great motivator, especially when you start to see real results, like better loan offers, quicker approvals, and increased financial freedom.
Common Credit Score Myths to Avoid
Myth 1: Checking Your Credit Score Hurts It
Not true. Whenyoucheck your credit score, it’s considered a “soft” inquiry and doesn’t affect your score at all.
Myth 2: Having No Credit is Better Than Having Debt
Wrong. Lenders need to see how you manage credit before they can trust you with larger loans. Having no credit history can actually be a disadvantage.
Myth 3: All Debt is Bad
Credit, when used responsibly, is a financial tool. Not all debt is bad, some, like student loans or a home loan, can be part of building wealth over time.
What If You’re Blacklisted?
Being blacklisted doesn’t mean all hope is lost. If you’ve had a judgment or default listed against your name, focus on:
- Settling outstanding debts
- Negotiating payment plans
- Requesting updated listings once paid
- Rebuilding slowly with small, manageable credit products
Over time, negative listings fall away (usually after 2 to 5 years), especially if you’ve been managing new credit responsibly in the meantime.
Build a Better Credit Future
Your credit score is not set in stone. Whether you’re rebuilding from past mistakes or starting from scratch, what you dotodaycan reshape your financial future. A better credit score means more than easier loan approvals, it means security, flexibility, and opportunities.
By committing to acredit health check, setting clear goals, and using smart tools like those offered by FASTA, you can turn your financial goals into realities.
Conclusion: A Stronger Score Starts Now
Improving your credit score doesn’t require luck, it requires action. And the good news is, it’s never too late or too early to begin. Start by checking your credit report, understanding what affects your score, and making informed decisions about how you borrow and repay.
Remember: a credit score is like a financial reputation. Build it with intention, protect it with discipline, and it will serve you well for years to come.
Whether you’re saving for a big life event, growing your business, or simply aiming to feel more confident in your financial journey, a better credit score is the first step. With tools like FASTA and a plan to follow, you’ve got everything you need to make this your best financial year yet.
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