Do you know your credit score?

Take a proactive approach and know what’s going on in your credit report.

Many of us only check our credit score once we have been denied a loan or given a high interest rate. But this is often far too late to do so.

Credit providers use your credit score to measure their risk in taking you on as a client before they approve or decline your application for credit, or for an increase in your credit limit.

Your credit score is calculated by a credit bureau and while it is based on your credit report, it also takes account of how you pay your bills, how much debt you have and – importantly – how all of that compares to other credit-active consumers.

Your credit score is not an endorsement or a criticism of you or your credit behaviour. It will also not determine whether you qualify for credit. That will depend on the credit provider’s own credit granting criteria – their own way of scoring their assessment of your risk. Your credit score gives credit providers a quick and easy overview of your general credit behaviour.

According to TransUnion, fewer than 5% of South African consumers make use of the legislation that entitles them to obtain their credit report, free of charge, from every credit bureau every year.

Regular examination of one’s credit report will enable consumers to check that all the information in it is accurate. Sometimes there could be errors or areas of dispute. For example, there were 22 822 disputes lodged about information held on consumer credit records for the quarter ending December 2014, according to the National Credit Regulator (NCR). These disputes may have been no more serious than an error in name or address, but some could well have involved a far more serious issue, such as inaccurate reflection of payments made.

Credit providers use your credit score to measure their risk in taking you on as a client before they approve or decline your application for credit, or for an increase in your credit limit.

A regular examination of one’s credit report could also provide timely warning to consumers that they might have been the victim of identity theft with the identity thieves running up enormous debt in their name.

Anyone who obtains their free credit report and has concerns about possible errors or discrepancies can contact the credit bureau that issued the report and lodge a dispute.

They should then provide the credit bureau with as much supporting documentation as possible – receipts or other evidence of payment. The bureau will investigate and respond to the consumer with the outcome within 21 working days.

If you would like a second credit report, you can get one for a minimal fee. You can even sign up for a service which sends you a monthly SMS with your summarised credit report details. 

Credit bureau data collected by the NCR shows some consumers battled financially last year as value-added tax (VAT) increased, and petrol increases also made things expensive for consumers. However, statistics also showed that consumer credit health has improved slightly from 38.9% to 37.4%. This number refers to consumers or accounts that are three or more months in arrears.

If you are unhappy with your credit score, you need to consider the following important factors that might be negatively affecting it – and what you can do to change that.

These tips from TransUnion can help you improve your credit score.

1. Account payment history – how you manage your accounts and whether you do or do not pay the entire instalment amount on time every month.

What to do:

Look at your credit report. You will see which accounts you have not been paying as you should. Then ensure you pay the full instalment owing on each of your accounts on time, every month.

2. Too much debt – how much you owe and how much of your available credit you’re using.

What to do:

Try to keep your utilisation of your current credit facilities to less than 35% of your limit. For example, if you have a credit card or a store account with a limit of R1 000, try to maintain the amount owing balance at under R350.

3. Negative information – publicly available information in your credit record, such as judgements or administration orders issued by courts that indicate that you were unable to meet all your debt obligations.

What to do:

Check your credit report for all negative information and take active steps to pay all your outstanding debts in full so that this information can be removed from your credit report.

4. Length of credit history – how long each of your accounts has been open.

What to do:

Maintain a healthy mix of credit (store accounts, credit cards, home loans, service contracts such as cellphone accounts, and so on) in order to establish a strong credit history.

5. Account application and enquiry activity – within a short period of time, how many account applications you submitted and how many new accounts you opened.

What to do:

Try not to shop around too much for credit at the same time. Too many simultaneous applications could indicate that there has been a significant change in your financial circumstances.

To obtain your free annual credit report online you can visit TransUnion at, Experian at, Clear Score at, Compuscan at And remember, always borrow responsibly with the future in mind.