Before establishing what a good credit score in South Africa is, you first have to understand what a credit score is.
A credit score is a 3 digit number based on the information contained in your credit report. This number may differ slightly depending on the credit bureau you request your credit score from.
Your credit report is a detailed report based on your credit history. Again, the information contained in this credit report will differ slightly based on the credit bureau you request it from.
Get your FREE credit report compiled by one of the biggest, trusted credit bureaus, Experian.
When looking at the range that Experian uses to give a credit score to its clients, this is what we know. With this scoring system, you want to aim for being, at a minimum, an average risk (611-628), and for first prize, a low risk applicant (660-750).
500 - 594 very high risk
595 - 610 high risk
611 - 628 average risk
629 - 659 low risk
660 - 750 minimum risk
When applying for a home loan, you should definitely check your credit score. If you are a first-time homebuyer, it’s important to note that, while having too much debt is a bad thing, not having any debt is also bad.
If you have no debt or no credit history, your credit score will be 0 and banks will see you as a high risk when applying for a home.
If this is you, you should work on opening one or two store or retail accounts to help boost your credit score. This will show lenders that you can pay your debts on time and consistently.
There isn’t one credit score that can be pushed as a good one for buying a home as different credit bureaus use slightly different scoring systems. You should, however, try to be as minimal of a risk to credit lenders as possible. This would mean then, when using Experian’s scoring system, that you should aim to be in the 660 - 750 minimum risk category.
Generally, when applying for loans or any access to credit, it’s a good rule of thumb to be minimal risk to a credit lender.
If you currently have a bad credit score and you’re looking for ways to:
Debt review, also known as debt counselling, can be your way to get a clean credit slate and credit record.
This will help you start afresh so that you can be in a better position to be:
Read: Debt Counselling - everything you need to know
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