Knowing the score

What does it mean to be financially responsible?

As a rule, you need to live within your means and your expenses should not exceed your income. A big part of this is to manage your credit responsibly and keep on top of your payments.

The way you manage credit can impact your ability to get loans, like finance for a car, a bond for a house or even a cell phone contract.

Tips Pay to instalments be more responsible: on time.

If you miss payments or are consistently late, that will be reflected on your credit report. A lower credit score, can give rise to additional fees or higher interest and worse credit terms and rates when you apply for loans. Avoid risky behaviour.

Each time you apply for credit, your bureau data is accessed and an inquiry notice is recorded on your credit report. Review your credit report regularly. Check your credit report at each bureau regularly to ensure there is no fraudulent activity in your name and that any errors can be fixed as quickly as possible. Only use credit only when you need it. Track your credit card spending to avoid going over your limit. Be cautious of becoming dependant on multiple short-term loans associated with high interest rates and in particular payday loans where repayments are deducted in full on payday. Understand your monthly

instalments. Never buy on credit unless you can afford the monthly instalments. Make sure you understand the pre-agreement statement and quotation that indicates how much you will pay every month and the total cost of the credit. If possible, repay more than your minimum monthly instalment. Never use credit to pay off other debt. Paying off debt by using other sources of credit is the quickest way to land you in financial trouble. Instead try to negotiate a better repayment deal with the credit provider. Be careful of service providers offering to “fix” your credit report. If there is information you need to change or dispute on your report, you can do so yourself for free.

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