What is a Credit Score?

Your Credit Bureau score is only a number. It does not endorse you and doesn’t tell credit providers or service providers whether you should be approved for credit. It doesn’t require you to be a specialist or to worry about it.

So, right? False. The Credit Bureau score will show you, in the form of a number or a percentage, what your credit report contains. It will show you how your credit standing compares to other consumers.

Most credit and service providers use your credit report as a key part of developing their credit risk score. Your employment history, your income, affordability, and the type of credit you apply for could all impact the outcome of your credit application.

The Credit Bureau score is calculated using a formula which evaluates your ability to pay your bills on time, how much you owe and how that compares with other borrowers. It basically tells you what your credit report has to say about how well you manage your existing credit.

What is a good credit score in South Africa?

The better your score is, generally speaking, TransUnion Consumer Credit Scores, for instance, can range between 0 and 999, or from poor to outstanding. These score bands can be used to determine the score:

  • EXCELLENT: 767-999*GOOD: 681-766
  • FAVOURABLE: 614-680
  • Average: 583-613
  • BELOW THE MEDIAN: 527 – 552.
  • UNFAVOURABLE: 487-526
  • POOR: 0-486

Your credit score is calculated from all credit information you have in your credit reports.

Your credit score is a guideline for applying for credit to purchase a house or car or increase your credit limit. If your score is below average, negative or unfavorable, it means that you need to work hard to improve your credit risk rating.

This could indicate that your credit report may be inaccurate. This could be a sign that your credit report is not as accurate as you think.

What factors affect your credit score?

You build a financial history by transacting with different banks, retailers, and other financial institutions, such as lenders. The amount of money that you have borrowed and the time you have paid it back on-time will determine your credit history.

Credit score is affected following:

  • Your credit score will be affected if you miss payments or don’t pay on time. Ramalho stated that although adverse legal information is removed as soon as the account has been settled, negative repayment histories remain for a few years.
  • Too much debt is the sum of how much you owe, and how much of your credit available to you. It is best to limit your credit card use to 35% of your limit.
  • Negative information, such as a court judgement against a consumer’s identity (commonly called blacklisting).
  • Credit history length
  • Account enquiry and application activity – in a short time span, how many accounts the consumer has opened and submitted.

FAQs

What Credit Score is Needed for a Payday Loan?

All lenders in South Africa follow the NCR’s guidelines on responsible lending. They will therefore look at your credit score and income to see if you can afford to repay the loan. Having an average credit score or good credit score can help in your application.

Do Payday Loans Check Your Credit Score?

Yes! All lenders in South Africa follow the NCR’s guidelines on responsible lending. They will therefore look at your credit score and income to see if you can afford to repay the loan. Having an average credit score or good credit score can help in your application.

Is 620 a Good Credit Score in South Africa?

Any credit score above 614 is considered favourable or good.

What is the Average Credit Score in South Africa?

An average credit score in South Africa is around 585. However, this can vary.