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LEARN WHAT CREDIT CAN DO FOR YOU

The value you get from actual goods purchased or services borrowed is one
benefit of credit, but here we’re focusing on what building your credit history
means for your future. And why it’s important to start today.

Download your free credit report
 * What is Credit
 * Why is it important
 * Where to start
 * Getting a credit score
 * Credit Report


FIRSTLY, WHAT IS CREDIT?

Credit is the ability to obtain goods or services before payment — based on
trust that payment will be made in the future.


WHY IS IT IMPORTANT?

Credit allows you to access what you need now as opposed to saving up and paying
cash. Being smart with your money doesn’t mean avoiding credit. It’s about
meeting your obligations timeously to maintain a positive credit history. When
you do this, you unlock opportunities for more credit and move toward reaching
your major goals.




WHAT ARE EXAMPLES OF CREDIT PRODUCTS?


RETAIL STORE ACCOUNTS


SERVICE CONTACTS


CREDIT CARDS


VEHICLE FINANCE


PERSONAL LOANS


HOME LOANS


WHERE DO YOU START?


 

To get credit and access life-changing opportunities, you need to build your
credit score. To do that, you have to open credit products. Most South Africans
start with a retail store account. When managed correctly, and not used to buy
luxuries you can’t afford to repay, this will build your credit score.


YOU’VE STARTED, BUT HOW DO IMPROVE YOUR CREDIT STANDING?

You may have a retail store account or cell phone contract — but want to make
yourself even more creditworthy. Continue paying your bills in full and on time.
The longer your borrowing history and the more diverse products you hold, the
better your credit score will be. Your next step is to open another form of
credit, trying to maintain a healthy mix of loans, store accounts and service
contracts.




WHAT IS A CREDIT SCORE?

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A credit score is a three-digit number that provides a snapshot of the
information found in your credit report and is one factor lenders can use to
evaluate how much credit to give you and at what interest rate. This number may
vary based on the information provided to each bureau.


WHAT AFFECTS YOUR CREDIT SCORE?

Your account payment history (whether your instalments are paid in full and on
time) is the main factor that affects your credit score. Other factors are
credit utilisation (the ratio of credit used to available credit), the length of
your credit history, and your mix of credit types. Lastly, new applications for
credit will temporarily affect your score as lenders will assume it’s risky to
extend credit if several loan applications have been made in a short period of
time.


WHY IS IT IMPORTANT?

Managing credit well and maintaining a good credit score can lead to better
rates on loans and major purchases. If you haven’t borrowed money before, you
won’t have a credit score, which will make it difficult to borrow money in the
future. This doesn’t mean you’re in a bad financial position — just that there’s
not enough data for financial institutions to decide whether to lend you money.


WHAT IS A CREDIT REPORT?

Your credit report is a compilation of data supplied to credit bureaus (like
TransUnion) by lenders from whom you’ve borrowed in the past. It contains
information about your financial history and payment behaviour.


WHERE CAN YOU GET YOURS?

You get one free credit report per year from TransUnion and other credit bureaus
in the country.

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Download your free credit report

Now you know why getting and managing credit is so important. Open a credit
product you can afford today and start building toward your goals of tomorrow.

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