How do I improve my credit score? - Part 1

Updated: Jul 16

Negociate Credit Solutions - Author Lauren Heekes

So firstly what is a credit score?

A credit score is a numeric summary of your credit history and a commonly used method for credit providers to predict the likelihood that you will repay loans they grant you.

What do the scores mean?

Credit scores range from 300 (poor) to 850 (excellent). Higher scores indicate that a consumer has consistently conducted themselves responsibly where credit is concerned. This includes on-time payments, low credit use and long credit history. Lower scores indicate a high risk profile for those that have consistently made late payments or overextended the use of credit.


There are no thresholds for good scores or bad scores, but there are guidelines for each.


Most credit providers view scores above 720 as ideal and scores below 630 as problematic. Here are some valuable tips for improving your credit score. Implemented responsibly, this should be a positive experience and credit scores should improve within 6 months.


To start with, Subscribe to a Credit Bureau to receive a monthly credit report. Your credit bureau will provide you with great ideas to improve your credit score. Check your credit report regularly and apply the tips below.


If you cannot afford to Subscribe to a Credit Bureau at present, you are entitled to a free credit report once a year from each credit bureau like TransUnion, Experian and XDS. Obtain one quarterly through the next year. E.g. Apply to TransUnion in April, Experian in August and XDS in December.

Let’s Go!


1. Account payment history – how you manage your credit instalment repayments. Payments must be made on time otherwise the late/missed/short payment will remain on your report for 24-36 months.

  • Set Up Payment Reminders – Write down payment deadlines for each bill in a planner or calendar and set up reminders online. Consistently paying your bills on time can raise your score within a few months.

  • Contact Your Creditors – Do this immediately to set up a payment plan if you miss payment deadlines and can’t afford your monthly bills. Quickly addressing your problem can ease the negative effects of late payments and high outstanding balances.


2. How much of your available credit are you using? Keep your outstanding balances to less than 35 percent of the credit limit. i.e. Limit R10,000 – Balance R3,500

  • Pay Down “Maxed Out” Cards First – If you use multiple credit cards and the amount owed on one or more is close to the credit limit, pay that one off first to bring down your credit utilization rate.

  • Consider a Debt Consolidation Loan – There could be a temporary drop in your credit score if you consolidate, but as long as you make on-time payments, your score quickly improves and you are eliminating the debt that got you in trouble to start with.

3. Negative information –information such as defaults, judgements or administration orders indicate to other credit providers that you were unable to meet all your debt obligations. Work hard to pay these off and have them removed.


4. Length of credit history – how long each of your accounts has been open. If you can afford to, maintain various credit facilities like credit cards, home loan and vehicle Loans, store accounts, voice and data contracts in order to establish a strong credit history.


5. Account application– how many new account applications have you submitted in a short space of time. Too many applications could indicate that you have been declined for credit.


6. Enquiry activity –Too many applications could indicate that you have been declined for credit and too many simultaneous new accounts opened could indicate that something has gone wrong with finances.


7. Payday Loans – Revolving pay day loans could indicate that you are not managing your budget correctly or are over indebted each month.

  • However, if you have bad credit and can’t find any other way to improve your score, you can apply for payday or short term loans. These are typically small loans that get repayment history reported to credit bureaus, and can improve your credit score. This is a last resort.


8. How fast will my credit score improve? It takes at least 3-6 months of good credit behaviour to see a positive change in your credit score. However if you pick up inaccurate information when obtaining your credit report and successfully dispute it, your credit score could improve immediately.


While it is impossible to put a specific time frame on credit repair, the less negative information you have the easier it is to repair your credit score.


It is very important to remember that the damage to your credit score diminishes over time. So, for example if you start by paying all instalments on time each month you will see a noticeable difference with 6 months.


#yourmoneybetterterms #creditscore

ABOUT THE AUTHOR - Lauren Heekes


Lauren is currently a registered member of the National Credit Regulator. Prior to that, she worked as a Financial and Technical consultant for McGregor-BFA (Now INET-BFA). McGregor-BFA provided Financial Advice, Trading and Market related data as well as Investment management software to various Asset Managers, University Business Schools and Investment entities. Thereafter experience was advanced to the Property Market working as a Project Manager for Propertyi. But it was actually her career at the IEB in Adult Education that inspired a passion of hers to educate consumers about responsible ways of managing their financial lives and the long term advantages of doing so. It is her belief that financial education should be taught from an early age. By doing so we can create a country that is truly economically stable with consumers that are driven not only by work ethics, but by becoming Financially Independent.


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