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Maintaining a good credit score is important to access loans and obtain better financial conditions. 3 essential tips will help you keep your credit score in check, okay?

Top 3 financial tips to keep your credit score in check.

1 – Pay your debts on time

One of the most important factors that affect your credit score is your payment history. Make sure you pay your bills and debts on time, as late payments can have a negative impact on your score.

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Set reminders, automate payments or use financial management tools to help you keep track of your payments and avoid late payments.

2 – Use credit responsibly to keep your credit score in check

Using credit responsibly means not borrowing too much and maintaining a proper balance between your credit limits and balances. Try to keep your credit card balances below 30% of your total limit.

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A high credit utilization rate can indicate an excess of credit and negatively affect your score. Also, avoid opening too many credit accounts in a short period of time, as this can raise red flags for lenders.

3 – Check your credit report regularly

It’s important that you are aware of what’s going on with your credit score. Request a copy of your credit report regularly and review the details carefully to ensure there are no errors or incorrect information to keep your credit score in check.

If you find a problem, contact the appropriate credit reporting agency to have it corrected. Being on top of your credit report will allow you to identify any issues early and take steps to correct them.

Remember that maintaining a good credit score takes time and financial discipline. Follow these tips and establish good financial habits to keep your credit score in check.

More top tips for getting your credit score under control

  • Open a bank account that allows you to carry out operations. For example, savings accounts allow users to not only manage their income and expenses safely and efficiently, but also to start building a history of financial transactions, which helps keep credit scores in check.

Thus, as you use your savings account, whether it is for salary collection, payment of basic services, transfers or other operations, the bank will record your transactions and if it achieves compliance, you may have favorable opportunities to request a loan.

  • Pay your debts on time. If you already have debt, to keep your credit score in check, pay your bills on time, even on the weekend. For example, as soon as you receive your salary or income, use the money to pay off financial debts before you even start other expenses.
  • Always remember to check your balance to organize yourself and have your credit score under control.
  • One piece of advice that many people don’t know is not to close old accounts. This is important to keep your credit score in check and increase your points.
  • Financial institutions, including those in South Africa, also take into account your score based on past transactions.
  • For example, how long have you owned your different accounts. In general, a longer credit history means a higher score. If you close old credit card accounts, you are lowering the average age of your accounts.
  • Think carefully before applying for new loans. Too many loans can backfire and compromise your credit score (and we want to keep your credit score in check, yeah?). Getting new loans is getting deeper into debt.

Therefore, your score may decrease. So, have a strategy. Evaluate if you really need to take out more loans. It is often better to use your financial reserves (and then replace the used money little by little) than to go into debt and have the effect “snowball”.

If you really need to take out loans, go for short-term ones, since they have less interest and you have a better chance of keeping your credit score in check, okay?

Importance of credit score in South Africa

In South Africa, as in many other countries, credit scores play a significant role in many aspects of personal and financial life:

  • Access to credit.
  • Loan approvals.
  • Lower interest rates.
  • Easier access to rented residences, for example.
  • Hire insurance and assistance for better prices.
  • More chances of getting work in financial institutions.

Also, if you are a South African citizen or resident in the country, not monitoring your credit score and letting it go down could face a number of challenges in your financial life.

You may have trouble getting credit and be subject to higher interest rates (since lenders consider people with low scores to be people who might default on debt). Having difficulty renting real estate, which harms your quality of life and that of your family.

Not having the opportunity to buy affordable insurance and assistance (which also puts you at risk, as many insurers in South Africa may take your credit score and financial history into account).

Finally, if you always pay on time and handle credit responsibly, you’re already on the right track. And with our tips you can keep your credit score under control. And you can find out more about your credit score and how it is calculated at various banking and financial institutions in South Africa.

You could also, for example, sign up for a tracking service offered in South Africa to monitor your score. And the best part is that many of these services are free.

We would like to extend our heartfelt gratitude to all the readers who took the time to visit and read the article on our website.

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