Credit plays a major role in our lives and when used correctly, it can help us achieve the things we need. A healthy credit rating means you can receive better interest rates on unsecured and secured credit, vehicle finance and credit cards or if you need a house loan or wish to rent a flat.
A credit provider will check your credit record to measure the risks of approving you for financing. While there are a few obstacles that can negatively impact your credit rating, such as unemployment or lack of knowledge on maintaining your credit status, you can work to regain a good credit score.
Here’s how you can keep your credit status healthy.
Focus on your payment history
Your payment history is one of the key factors that can either positively or negatively impact your credit rating. Lenders look at your payment history to determine how trustworthy you are and use this information as a benchmark when you apply for credit. How you manage your payments is what will set you apart, which is why it’s prudent to pay your bills on the agreed date. If you can't make minimum payments, you should immediately contact your lender to make an alternate arrangement with them.
Keep your credit usage low
Credit usage refers to the amount of credit you've used compared to the total amount of credit you have across your accounts (store and credit cards). This accounts for 30% of your rating and can impact your credit if the total amount owed is too high a percentage. It’s best to keep it at 30% of your total credit limit. For example, if you have a R10 000 total credit limit available, try to only use R3 000 or less. Spending as little as you can will show lenders that you aren't dependent on credit and that you’re not a non-payment risk. This doesn’t apply to personal loans or vehicle finance with a set time frame before you finish your repayments.
Keep an eye on your rating
Checking your credit rating is one of the most important things to do to ensure a good credit status. When you know your rating, you’ll also know if it needs improvement. Use credit check tools like DirectAxis Pulse to check your credit rating. It’s free and can also help you:
- Learn how to maintain and improve your credit score rating with customised tips.
- View credit enquiries and judgments, and ensure you spot fraudulent activities under your name so that you can report them.
We understand that building a healthy credit record with little or no prior knowledge of how it works can be daunting. DirectAxis Pulse will help you build and maintain a healthy credit status so you can achieve the life of your dreams.
Visit DirectAxis Pulse for a free credit rating that’ll help you keep track of your credit status and become more confident with how credit works.