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The Invisible Number That Controls Your Life
In South Africa, there is a number attached to your name that is arguably more important than your age or your phone number. It is your credit score. This three-digit number determines whether you can buy a house, get a car finance deal, or even rent an apartment in a secure complex. Yet, for many, the credit score remains a mystery until a loan application is declined.
The term “blacklisted” is still commonly used, although it is technically outdated. Today, credit bureaus hold positive and negative data. You aren’t on a blacklist; you simply have a low score or a negative listing. The good news? No matter how bad your score is today, it can be fixed. It takes discipline, time, and a clear strategy.
Step 1: Get Your Report and Face the Truth
You cannot fix what you cannot see. Every South African is entitled to one free credit report per year from each of the major bureaus (TransUnion, Experian, XDS, Compuscan). Go online and download yours. Don’t just look at the score; look at the line items.
- Check for Errors: Identity theft is rife in SA. Ensure every account listed actually belongs to you. If you see a clothing account you didn’t open, dispute it immediately.
- Check for Outdated Info: Negative information like judgments or defaults must be removed after a certain period (usually 5 years for judgments, or sooner if paid up). If an old debt is still haunting your report, log a dispute.
Step 2: The Golden Rule of Payment History
Your payment history accounts for roughly 35% of your score. This is the biggest slice of the pie. To fix your score, you must become obsessed with paying on time.
The Strategy: Automate your payments. Set your debit orders for payday. If you pay manually, you risk forgetting or spending the money elsewhere. Even one missed payment of R100 on a store card can drop your score significantly. It signals to lenders that you are unreliable.
Step 3: Manage Your Credit Utilization
This is a secret weapon for boosting scores quickly. Credit utilization refers to how much of your limit you are using. If you have a credit card with a R10,000 limit and you owe R9,500, you are “maxed out.” This makes lenders nervous, even if you pay the minimum every month.
The Fix: Aim to keep your utilization below 30%. On a R10,000 limit, try not to owe more than R3,000. If you have a lump sum (like a tax refund or bonus), pay down your credit card balance first. You will often see a jump in your score within 30 days of lowering your utilization.
Step 4: Stop Applying for Everything
Every time you apply for credit—whether it’s a loan, a credit card, or a new cellphone contract—the lender does a “hard inquiry” on your profile. If you apply at five different banks in one week because you are desperate for cash, your score will plummet. It looks like financial distress.
The Rule: Only apply for credit when you genuinely need it and when you are confident you will be approved. Use online “pre-qualification” tools where possible, as these often do a “soft check” that doesn’t hurt your score.
Dealing with Judgments and Debt Review
If you have a court judgment against your name, you cannot simply wish it away. You must pay the debt in full. Once paid, the credit provider must issue a “paid-up letter,” and the bureau must remove the judgment from your record within 7 days (thanks to recent amendments to the NCA). If you are under Debt Review, you are legally protected from creditors, but you cannot access new credit until you have a Clearance Certificate. While restrictive, Debt Review is often the only way to save your assets if you are drowning.
Conclusion
Rebuilding a credit score is a marathon, not a sprint. It might take 6 to 12 months to move from “high risk” to “good.” But the reward—lower interest rates and financial freedom—is worth every cent and every second of effort.
