Understanding Credit Scores in South Africa
Your credit score affects everything from loan approvals to rental applications. Learn how the system works, how to check your score for free, and strategies to improve it.
What is a Credit Score?
A credit score is a three-digit number that represents your creditworthiness - essentially, how likely you are to repay borrowed money. In South Africa, credit scores typically range from 0 to 999, with higher scores indicating better credit health.
Your credit score is calculated by credit bureaus (also called credit reporting agencies) based on information in your credit report. This includes your payment history, how much debt you have, how long you've had credit, and the types of credit you use.
Why Your Credit Score Matters:
Credit Score Ranges Explained
While different credit bureaus may use slightly different scoring models, here's a general guide to what different score ranges mean:
Access to best rates and highest loan amounts
Qualify for most loans with competitive rates
May qualify but with higher interest rates
Limited options, higher rates, smaller amounts
Difficult to qualify, consider secured loans or debt review
Note: These ranges are approximate and based on common South African scoring models. Each credit bureau may have slightly different scoring criteria, and lenders may have their own minimum score requirements.
What Affects Your Credit Score?
Payment History
~35% impactThe biggest factor. Late payments, missed payments, defaults, and accounts in collections all damage your score significantly. On-time payments build a positive history.
Credit Utilization
~30% impactHow much of your available credit you're using. Using more than 30% of your credit limit (e.g., R3,000 of a R10,000 limit) can lower your score. Lower utilization is better.
Credit History Length
~15% impactLonger credit history is better. This is why it can be beneficial to keep old accounts open, even if you don't use them often.
Credit Mix
~10% impactHaving a variety of credit types (credit cards, personal loans, vehicle finance, home loan) can positively impact your score, showing you can manage different types of credit responsibly.
New Credit Inquiries
~10% impactEach time you apply for credit, a "hard inquiry" is recorded. Too many inquiries in a short period suggests financial distress and can lower your score.
How to Check Your Credit Score for Free
Under the National Credit Act, every South African is entitled to one free credit report from each credit bureau per year. Here are the main credit bureaus:
| Credit Bureau | Website | Free Report |
|---|---|---|
| TransUnion | transunion.co.za | Yes, 1 per year |
| Experian | experian.co.za | Yes, 1 per year |
| Compuscan | compuscan.co.za | Yes, 1 per year |
| XDS | xds.co.za | Yes, 1 per year |
Tip: Space out your free reports throughout the year. Check one bureau every 3 months to monitor your credit regularly. Also, checking your own credit report does NOT affect your score - only applications for credit create hard inquiries.
How to Improve Your Credit Score
Pay On Time, Every Time
Set up debit orders or reminders. Even one late payment can significantly impact your score. If you're struggling, contact creditors before missing payments to negotiate.
Keep Balances Low
Aim to use less than 30% of your available credit. If you have a R10,000 credit limit, try to keep the balance below R3,000. Pay down existing balances where possible.
Check for Errors
Review your credit reports for inaccuracies. Dispute any errors you find - incorrect information can unfairly lower your score. You have the right to have errors corrected.
Don't Close Old Accounts
Long credit history helps your score. Keep older accounts open (even if unused) to maintain your credit history length and available credit ratio.
Limit New Applications
Only apply for credit when you genuinely need it. Multiple applications in a short period look risky to lenders. Space out applications by at least 6 months.
Build Positive History
If you have no credit history, consider a secured credit card or become an authorized user on someone else's account. Regular, responsible use builds positive history.
What Hurts Your Credit Score
Even payments just 30 days late are reported and can drop your score significantly. The more recent the late payment, the bigger the impact.
Accounts handed over to collection agencies severely damage your score and stay on your record for 5 years in South Africa.
Court judgments for unpaid debts have a major negative impact and remain on your record for 5 years.
Maxing out credit cards or using more than 30% of your available credit signals financial stress.
Each application creates a hard inquiry. Multiple inquiries in a short time suggest desperation for credit.
While debt review protects you from creditors, it's flagged on your report and prevents new credit until completion.
Ready to Compare Loan Options?
Now that you understand credit scores, explore loan options that match your credit profile.