Are you often declined when you apply for loans or other finance and can't understand why? If you have problems which reflect on your credit report and your score is low then potential creditors will probably not offer you finance. Every time you apply for a loan, try and open an account or apply for a cellphone contract your credit profile is being accessed. For this reason making sure that you have a good credit rating is essential. Credit Report SA may be able to help you get access to your credit score for free and makes it easy for anyone to view their basic credit profile. Keep reading for information on how getting a credit report and understanding your credit rating can benefit you. Note that the points below are a general guideline and each company you apply with may have differing criteria to get approved for a loan or other finance. As per the National Credit Act every South African is entitled to one free credit report a year and we have listed companies you can request a credit report from below.
If you get a credit report and see that you score is low it means that you have credit problems. An average score ranges from approximately 550 to 600 and goes up to 1000 which is considered excellent. If your score is anything below 550 to 600 then you should start looking at ways to improve your rating and may find it difficult to get a loan or other finance. If you get a basic free credit report it should tell you what your credit rating is without having to pay. This allows you to see how you score, what potential creditors see when they access your credit profile and whether or not it needs improvement. Premium credit reports require payment though will give more detailed information as to your credit status.
There are many factors that can have a negative impact on your credit score and it is important to understand what they are. Skipping or only making part payments for any account, loans or other finance that you may have is one way to negatively impact on your credit score. Note that if you miss payments now they will still reflect on your credit profile years down the line. If you default on payments for an extended period a credit provider may load a notice of default with the credit bureau which will further negatively impact on your credit rating. A judgement can also reflect on your profile and is when a credit provider has decided to take you to court over a debt. Also be aware that if you apply for a lot of loans in a short period of time this could have a negative impact on your score. Having too many accounts or micro loans could also be considered a higher risk even if they are all up to date.
Paying all your accounts on time will help you improve your credit rating as can spending wisely on your credit card(s) every month. Don't spend up to your limit every month if possible, try and budget to only use a percentage of your credit limit and pay it back in full if possible. Also try not to miss any payments and don't open too many accounts or apply for too many loans if it is not necessary. Having a credit history is important in terms of applying for finance which means that if you have never opened an account or taken out a loan then you may not have a credit score at all. If you do plan to apply for a bond or a large cash loan in the future it would be a good idea to have established some kind of credit record. To establish a good credit record possibly go into the bank and ask what the options are for a credit card, loan, overdraft or other account that helps you establish a good credit history. Remember that even one missed payment can reflect negatively on your credit report so don't miss payments wherever possible.
If you do have problems with your debt, can't get approved for loans or other finance then understanding your credit score and trying to fix it may be a good idea. Getting a credit report is a good way to do this and every South African is entitled to one free credit report a year as per the National Credit Act. If you would like to get a free credit report then you can go contact one of the credit bureaus and request one :
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