The old saying ‘you shouldn’t bite off more than you can chew’ is a particularly apt phrase when it comes to financial health and keeping a good credit score. If you regularly spend more than you can afford, credit bureaus will give you a poor credit score. Financial services providers will see you as a riskier prospect when it comes to loans, credit cards, car finance and home loans.

You are entitled by law to one free credit check per year through a credit bureau. But with the Nedbank Money app, you can regularly keep track of your credit for free – even if you’re not a Nedbank client. You’ll also get expert tips on how to maintain a healthier credit score.

Why you want a good credit score

A good credit score makes it more likely that you will be granted credit, and it can also secure you better interest rates. Whether it’s a home loan for your dream house, vehicle finance for a much-needed car, solar finance to go off the grid, or a personal loan to meet needs that will improve your life, you’ll be more likely to obtain any of these credit solutions if you have a good credit score.

But what is a good credit score?

‘A score of 621 is what you need to unlock personalised credit offers and interest rates. 621 is considered a good number, and if you achieve this or higher, you are doing very well in terms of your credit profile,’ says Mandy Blewitt, Nedbank Senior Marketing Manager for Retail and Business Banking. ‘On the Nedbank Money app, you will see your score range between 520 and 730. This scale is used by Experian, with whom we’ve partnered, but other credit bureaus might use slightly different number ranges. 621 or more will ensure you have access to personal loans, credit cards and a variety of money lending solutions that most South Africans don’t have access to because their credit scores are too low.’
 

Ways to keep your credit score healthy

1. You can open a credit card or retail store card account, use it sparingly and ensure you pay it off in full every month. Try to use no more than 50% of your credit limit on any card you sign up for – by not using the maximum available, you’re keeping your monthly repayments more affordable, which is another habit that reassures credit bureaus.

2. Signing up for a cellphone contract and paying your subscription on time every month is also a good way to build your credit score. However, make sure you choose a phone and a subscription that’s affordable on your budget, to ensure that your income-to-debt ratio remains reasonable.

3. Make sure you pay instalments on any account or contract you sign up for by the monthly due date. Missed or late payments are the most common cause of credit score problems. In fact, if you can pay your instalments before the due date, or pay more than the minimum amount, you’ll save money in the long run. Interest is calculated on the remaining balance owed, and early payments or extra payments reduce that balance faster.

4. Taking out a small personal loan could also help you to build a solid credit record and a higher credit score. As you service this debt every month, the credit bureaus will note that you pay on time and that you are a responsible borrower. If you need a loan, consider the available options and offers to find the best deal. If you take out a personal loan with Nedbank and open a Savvy Plus Gold or Savvy Bundle Platinum Account at the same time, we will pay you R200 cash back every month for the duration of the loan term. Terms and conditions apply.

5. Don’t apply for too many retail accounts, contracts, or personal loans at the same time – this can hurt your credit score. Every time you apply for credit of any kind, the credit provider performs a credit check, and too many credit checks over a short space of time will raise a red flag on your profile.

‘With our credit score tool, you can check your score monthly on the app to ensure you’re keeping it above 621, and it doesn’t affect your credit score negatively. You can also access a credit report in the Money app, whether you’re a Nedbank client or not,’ Blewitt adds.

Kick-start your credit health journey today.