Do You Know Your Credit Score?

Credit Score

Don’t fall into the trap of having a bad credit record and end up not being able to get home loans or even store credits. See below on how you can have and maintain a good credit score.

What is a credit score?

A Credit Score is a number designed to show you the strengths and weaknesses of the information in your credit report.  It shows you what your current credit standing is, compared to other consumers.

Credit and Service providers use the information in your credit report as an important contribution to develop their credit risk score. 

Your credit score is calculated using a formula that checks how much debt you have, how good or badly you pay your bills and how all that stacks up against other borrowers. The number gives you an overall management of your credits. The higher the score number the better 

Why is it important?

Your credit score can help you when you borrow money 

  • Having a low credit score can make it difficult for you to find a bank or credit company to lend you money.  

Your credit score can impact your insurance premiums 

  • A low credit score can make your premiums go higher than of a person with a high credit score. People with high credit scores often qualify for discounts. 

Employment Opportunities 

  • A very controversial practice is taking place where employers check the credit of a new potential employee. The believe the credit history can determine one's responsibility. 

How do I check it?

Octagon Credit Services is launching a new website call Credit Dot Cozaa (hyper link) that can help you check your credit score in a few minutes. Visit our website to see other credit related services. 

What are the different levels of a credit score?

In South Africa, credit scores can range from 999 to 0, with higher scores identifying very responsible borrowers and lower scores suggesting less responsible borrowers. Generally, the higher your score, the better. In the eyes of creditors, however, scores are viewed like this 

• EXCELLENT: 767 – 999 
• GOOD: 681 – 766 
•  FAVOURABLE: 614 – 680 
•  AVERAGE: 583 - 613 
•  BELOW AVERAGE: 527 – 582 
•  UNFAVOURABLE: 487 – 526 
•  POOR: 0 - 486 

How do I improve it? 

Knowledge is power. Even if the news is bad, knowing what your credit score is gives you the power to change it - or maintain it. Companies like Credit Dot Cozza offer credit checks. 

Ensure you pay all your monthly installments on your accounts in full and on time. 

Use your less than 35% of your available credit, for example, if you have a store card and your available credit is R1000, try to keep the owing amount to less than R350. 

Check your Credit report for any negative information in your credit report, for example, a judgement or administration orders issued by the courts which say you are unable to pay your debts. 

Maintain a health mix of accounts (store accounts, credit cards, home loan, service contracts such as cell phone accounts and so on). 

Check your credit report regularly for anything that does not look right and contact the credit bureau. This could protect you from identity theft. 

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