Tried-And-Tested Ways You Can Improve Your Credit ScoreJan 28, 2021
At certain points in our lives, we end up having to rely on credit. Credit is a system where a provider or company lends you money with the expectation that it will be paid back over time, with interest. It is used for many reasons, such as covering an unforeseen expense, paying off a big purchase with a credit card or even financing a brand-new vehicle.
In a nutshell, your credit score is your summarised borrowing habits and relationship with credit. Found in your credit report, it’s what new credit providers usually look into when they’re deciding whether or not to lend you any funds. When you have a good credit score, that signifies you being in good standing. It means you don’t have large amounts of debt, and that your repayments are regular and on time.
It’s incredibly important to maintain a healthy credit score when you’re applying for online loans in South Africa, loans in general or some other form of credit. There are many things you can do to maintain a good credit score. More than anything, if your credit score is low, there are several ways to improve upon it:
Make regular, timely payments on all your accounts
It can be pretty tough to manage the various account payments you have. This will hold particularly true if you have a store card or two, just bought appliances with a high price tag, need to pay school fees or are financing a brand-new car. Forgetting to pay even just one of your credit providers will cause your credit score to suffer.
When your debt obligations are paid on a regular basis, credit providers will see that you can repay debt over time without defaulting. A default is when failure to make a repayment happens.
A good way to manage things is to set up regular account payments. In case regular repayments are not possible, mounting interest will ease. It can also prevent a credit provider from collecting outstanding payments.
Take a hard look at your credit card debt
Your best bet is always to pay cash for anything you’ll be able to afford instead of using your credit card. However, there are several items that are hard to buy in one go or just entirely expensive. When credit is used, these expenses can be paid over time instead of just all at once.
A good rule of thumb is not to use more than 30% of your credit balance that’s remaining. It’s important not to overspend, since repayments will be more expensive and, worse, negatively influence your credit score.
It’s important to have a good credit score when you aim to take out a loan. But if your credit score is not quite favourable, don’t fret. There are several ways you can improve upon this. Key ways include managing account payments and making sure to review any credit card debt. By following these tips, you’ll surely maintain a good credit score.
In need of quick online personal loans in South Africa? Hoopla Loans has you covered! We are one of South Africa’s fastest-growing online loan brokers. Reach out to us today to get started!