Page 23 - Dainfern Precinct Living issue 7 2022

Lifestyle

Most South Africans don’t

know their credit score
and few bother to find

out, even though their
creditworthiness is amongst

the most important financial
information there is about

them.

our credit report can
determine whether you
qualify for a home loan,
Yvehicle finance, a personal
loan or other forms of credit. It also
determines what interest rate you’ll
pay, and if a landlord will consider you a
suitable tenant. You may also be asked
by a potential employer for a reference
to confirm that your financial status is
sound, as employees that prove to be
financial delinquents normally end up
being a nightmare to manage.

“Your credit score affects more aspects
of your life than most people realise,” “A lot can happen in a year and if there’s If you have several debt commitments,
says Fiona Ssemanda, Sales Head, at a sudden downward change in your then use the credit report to try and
specialist loan provider DirectAxis. credit score for no apparent reason, you prioritise them. Pay off debt with
need to respond quickly. It could be the highest interest rate first, while
“From banks to cell phone companies, anything from an error to identity theft.” maintaining minimum payments on other
everyone bases their decision about There are a number of free online tools accounts. Try to avoid taking on more
how much of a risk you might be based you can use to keep track of your credit credit, especially revolving credit such as
on your credit score. Essentially, it’s score. Usually all you need to do is store accounts. Increasing your available
your financial reputation and it's more register and you will be able to check credit could also lower your score.
influential than any other reference you your score as often as you like.
can provide. That’s why it’s important to Although keeping your creditors informed
know your credit score and ensure that Very few consumers have perfect credit if you’re having difficulty won’t improve
the way you behave financially builds scores, which means nearly all have your score, negotiating a payment
your financial reputation over time,
schedule is a positive step. Over time, as
room for improvement. A benefit of
THE REWARDS rather than detracts from it.” bettering your score is that you will you settle the outstanding balances, this
be able to access credit if you need it.
should reflect positively on your score.
Finding out your credit score should
be easy. By law, you’re entitled to one Another is that it could save you money. It is important to remember that any
People with higher credit scores can be
free credit report a year and you can considered for better interest rates on overdue account will negatively affect
get this from any of the credit bureaus. loans, insurance premiums and rentals. your credit score and paying it off, or
These are the companies that compile “There is a perception amongst some closing it, doesn’t make your payment
information about consumers’ financial consumers that there’s nothing you can history go away - this information can
history, particularly whether you pay do about a below-average credit score,” stay on your record for up to five years.
your bills on time, how much debt says Ssemanda. “This simply isn’t true, “Establishing and maintaining a sound
OF HAVING A REPUTABLE financial profile compares to that of Ssemanda says the first thing to advantage that is often underestimated.
you have and, importantly, how your
financial reputation gives you an
although it can take some time.”
other consumers.
It’s like getting a bursary, and then
consider is whether you’re paying your
you fail a subject – it’s something you
FINANCIAL RECORD But Ssemanda warns that checking your debts on time. “Even paying a few days take for granted until it’s taken away,”
score once a year may not be enough.
late can affect your score.”
concludes Ssemanda.
For more information about how to achieve a better credit rating visit:
www.directaxis.co.za/make-a-plan/how-to-build-a-good-credit-record
To register for a free credit report from TransUnion, go to:
https://mytransunion.co.za/Registration/Index/YCR001
or go to Experien’s My Credit Check: www.mycreditcheck.co.za
20 DPL issue 7 2022 DPL issue 7 2022 21