credit record

Your Credit Record Explained

Jun 20, 2016

Being in the dark when it comes to your credit worthiness is a very bad idea. An identity thief could be taking out credit under your name and not repaying it, wreaking long-term havoc with your record. Next thing you know, you need urgent credit and your applications are simply rejected.

Did you know you are entitled to pull one free credit report a year from each of South Africa’s four credit bureaus? Even if you were aware, do you ever take advantage of this?

It’s alarming to note that of our country’s 23 million credit users only around 100 thousand actually draw their free credit report yearly.

‘Your credit score is just a numerical summary of your report’


Payment history is king!

People still don’t really understand credit scores. More significantly, they don’t realise that it’s their payment history that really determines whether their applications are accepted or rejected. Your credit score is really just a numerical summary of your credit report.

Remember that even after you’ve settled your debts, if you’ve missed payments in the past, it will take three to six months for your credit profile to recover. Your track record in the last two years is what creditors focus on most, when processing an application.

‘A soft enquiry has no effect on your credit score or record’


Will a credit check affect my record?

NO! When you access your credit report, it has no effect on your credit score or record. It’s a ‘soft pull’ or ‘soft enquiry’. This means only you can see that you’ve pulled it.

BUT, when you apply for credit, the credit provider will review your record and a ‘hard enquiry’ will be added. This means other creditors can see that you’ve applied for credit. Hard enquiries can bring down your credit score.


‘Your creditors need to know who they are doing business with’


What is the point of a credit record anyway?

Think of it as doing business with a creditor, each time you take out credit. Your creditors need to know who they are doing business with. How do you handle your accounts? Do you pay in full and on time? What is your financial track record like?

In conclusion, clearly the best thing to do is to pull that free credit report every year and to work on improving your profile. That way, you’ll have access to credit when you need it.


‘Build up a good payment profile and lenders will readily offer up finance’


Credit Habits to Ditch & Keep

Good habits: Don’t focus too much on your credit score. Rather concentrate on dutifully making your payments on time and in full every month. In so doing, you’ll build up a good payment profile and lenders will readily offer up finance, as you will be considered a low risk client.

Bad habits: Skipping or making late payments, falling into arrears, ignoring outstanding balances, applying for too many loans – these are all things that put creditors off.

Our advice, contact us today and we’ll do a free soft credit check for you!


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