4 SCORE KILLERS

DRUM - - Advice -

You’re en­ti­tled to one free credit record a year from one of the credit bu­reaus but few peo­ple make the ef­fort. In the first quar­ter of this year only 196 920 con­sumers re­quested their credit records, ac­cord­ing to the NCR’s Credit Bu­reau Mon­i­tor, though there are more than 25 mil­lion ac­tive credit users in SA.

When you re­quest your credit score you can check which of the fol­low­ing four fac­tors are count­ing against you and then take steps to im­prove it.

1 YOUR PAY­MENT HIS­TORY

Be sure to pay your full monthly in­stal­ments on time ev­ery month. The most com­mon rea­son for SA con­sumers’ bad credit scores is fail­ure to pay the full monthly in­stal­ment on their credit agree­ments, says Matthys Pot­gi­eter from DebtSafe.

What can you do? If you’re un­able to keep up your monthly in­stal­ments, don’t hes­i­tate to talk to the credit provider. It’s also in their best in­ter­est that you pay off your loan so they’re gen­er­ally agree­able to ne­go­ti­at­ing a lower in­stal­ment over a longer pe­riod.

A fi­nan­cial plan­ner or even a debt coun­sel­lor can also help you come up with a plan to pay off your debts, even if you don’t go into of­fi­cial debt coun­selling.

2 CREDIT AP­PLI­CA­TIONS

Each time you ap­ply for credit the credit provider checks your credit record. This leaves a record of why and what you’re ap­ply­ing for. If there are too many of these en­quiries from credit providers it’ll make your credit record look bad. The more credit you ap­ply for the big­ger the risk you ap­pear to be to credit providers.

What can you do? Don’t ap­ply for credit of­ten. For ex­am­ple, you don’t need a lot of re­tail ac­counts.

3 NEG­A­TIVE IN­FOR­MA­TION

Legally, non­pay­ments must be in­di­cated on your record for a year. Se­ri­ous trans­gres­sions, such as be­ing placed in ad­min­is­tra­tion or un­der se­ques­tra­tion, stays on your record for five years.

What can you do? Pay debt in full so any in­di­ca­tion of non­pay­ment can be re­moved from your record. If the neg­a­tive in­for­ma­tion stays on your record for longer than the legally stip­u­lated year, con­tact the bu­reau. It must is­sue you with a ref­er­ence num­ber and is legally ob­li­gated to cor­rect the record within 20 days.

If it does not do this, you can ap­proach the Credit Om­buds­man (cred­it­o­mbud.org.za).

4 TOO MUCH DEBT

If you can’t pay your debt this will show on your credit record and it could be dif­fi­cult to get even a cell­phone con­tract.

What can you do? Don’t get into debt if you know for a fact you can’t af­ford it. It’s your re­spon­si­bil­ity to be hon­est about your fi­nances when you ap­ply for a loan, Pot­gi­eter says.

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