Credit Scores in South Africa: How to Build, Maintain, and Improve Your Score

Your credit score is a key factor in your financial health. It affects your ability to secure a home loan, vehicle finance, personal loans, and even certain job opportunities. A strong credit score can help you qualify for lower interest rates and better financial products, while a poor score can make borrowing expensive or even impossible.

This guide will explain how to build, maintain, and improve your credit score in South Africa, ensuring you stay in good standing with lenders.

What is a Credit Score?

A credit score is a numerical representation of your financial behavior and creditworthiness, assigned based on your borrowing and repayment history. In South Africa, credit scores range from 0 to 850, with higher scores indicating lower risk to lenders.

Credit Score Ranges in South Africa

• 781 – 850 (Excellent): You are highly likely to be approved for loans with the best interest rates.

• 661 – 780 (Good): You are considered a responsible borrower and will likely receive favorable loan terms.

• 610 – 660 (Fair): Some lenders may approve you, but at slightly higher interest rates.

• 500 – 610 (Poor): You may struggle to get credit, and if approved, expect high interest rates.

• 0 – 499 (Very Poor): Most lenders will see you as a high-risk borrower, making it difficult to secure loans.

How to check your credit score?

The easiest way we have found is to use ClearScore. It takes less than 5 minutes to sign up and it is absolutely free.

How to Build Your Credit Score from Scratch

If you don’t have an existing credit history, you will likely have a score of zero. Many lenders hesitate to extend credit to individuals without a track record, so building credit from scratch requires a strategic approach.

1. Open a Credit Account

• Start with a store account (e.g., Woolworths, Edgars, Truworths, or TFG). These are easier to qualify for than traditional credit cards.

• Alternatively, apply for a low-limit credit card from your bank (e.g., FNB, Standard Bank, ABSA, Nedbank, Capitec). A secured credit card (where you provide a deposit as collateral) is also an option.

• Use your credit responsibly by making small, manageable purchases each month.

2. Pay Your Bills on Time

• Your payment history accounts for 35% of your credit score. Even a single late payment can negatively impact your rating.

• Set up debit orders for loan repayments, store accounts, or credit cards to ensure you never miss a payment.

3. Keep Credit Utilization Low

Try to keep your usage below 30% of your total credit limit.

• Example: If your credit limit is R10,000, avoid spending more than R3,000 at any given time.

4. Avoid Opening Too Many Accounts at Once

• Every time you apply for credit, a hard inquiry is recorded on your credit report. Too many hard inquiries in a short period signal financial distress to lenders.

• Apply for new credit only when necessary.

How to Improve a Low Credit Score

1. Settle Outstanding Debt

• Pay off overdue accounts as soon as possible, starting with those that are in arrears or have gone to collections.

2. Reduce Your Credit Utilization

• Paying off a portion of your outstanding balance can help improve your utilization rate.

3. Avoid Taking on More Debt

• Stop applying for new credit until your financial situation improves.

4. Apply for a Credit-Limit Increase (If You Can Manage It)

• If you have a good repayment history, you may qualify for a higher credit limit without applying for new credit.

5. Build Positive Payment History

• Even small bills—such as municipal accounts, DSTV, or Telkom contracts—can contribute to your payment history.

How Long Does It Take to Improve a Credit Score?

The time required to improve a credit score depends on several factors, including your past credit behavior and the actions you take to improve it.

• Small improvements (e.g., reducing utilization, paying off a minor overdue account): 1-3 months

• Recovering from a few late payments: 6-12 months

• Rebuilding after a default or legal judgment: 2-5 years

The key is consistency—making responsible financial decisions over time will always yield positive results

Final Thoughts

Your credit score is one of the most important financial tools you have as a property investor. By understanding how it works and taking proactive steps to build, maintain, and improve it, you can unlock better financial opportunities. Whether you’re applying for a home loan, financing a vehicle, or simply looking for better credit card rates, a strong credit score will always work in your favor.