Finance is, obviously, a key concern for all of us at this time. Since you’re already thinking about new budgets and financial challenges, you may as well as take a moment to contemplate your credit score, too.
In fact, according to African Bank, you should check your score regularly as part of good financial hygiene. It’s more important than ever to keep track of how lenders perceive your credit risk, as this affects their willingness to lend you money – and this may be critical moving forward, when the real impact of the economic shutdown becomes apparent, especially if you find yourself in need of some financial assistance.
To maintain a favourable credit score and ensure you qualify for loans going forward, remember the following:
- Any default on payments like rental, cellphone contracts, bond, and vehicle repayments will be noted on your credit record. Make sure you keep these up to date or, if this simply is not possible, alert your lenders to your predicament and find out if it’s possible to make alternative arrangements.
- Don’t use up all the credit available to you. Leaving a margin of 30% shows that you are able to manage your finances efficiently, which will make lenders more likely to trust you with a loan.
- Prioritise your spending. Increased financial pressure means that some expenses will have to go, so review your budget to find out which ones – like education – cannot be cut down, and which can.
Checking your credit score is a simple – and most importantly, cost-free – exercise: simply request a report from one of South Africa’s credit score reporting agencies. You’re entitled to one free report every year, although banks like African Bank even allow you unlimited access to a detailed credit report on a monthly basis; a service that is not limited to African Bank customers.