Make a Plan

It Pays to Know Your Credit Score

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During uncertain times, you may need to make financial decisions you weren’t planning on making now or perhaps ever. Whether it’s something small such as opening a clothing account, moving into a new home, your credit score could affect the outcome of these decisions.

If you have a poor rating it’s likely that your application will be turned down or you’ll be charged extra interest to counter the risk that you won’t pay back the money in time.

A bad credit score may not even be your fault. The information the credit bureau has may be wrong or outdated, or someone could have created a fraudulent profile. You could have a bad credit score and not even know why loan applications or other transactions are being denied.

Knowing your credit score is a good place to start. By law you are entitled to one free credit report each year. You can get this from any of the credit bureaus – the companies that calculate credit scores. The big four credit bureaus in South Africa are Transunion, Compuscan, Experian and XDS.

If you have a high credit score then you can relax, but make a note to check your rating every few months, or read why you should be checking your credit rating regularly during uncertain times.

If your credit rating is poor, you may have a problem, but the good news is that there are some things you can do about it.

How to improve your credit rating

  • The first of these is to make sure that there are no mistakes. Make sure there are no late payments listed incorrectly and that the amount on each credit account is accurate.
  • You should also check to see that there are no unfamiliar accounts or unpaid debts. If fraudsters get hold of your ID number or other personal information, they can use this to open accounts in your name. The trail of unpaid bills they leave then gets reflected in your credit score.

How to fix a bad credit rating

If there are no mistakes or illegal transactions, you can still improve your credit rating, but it will take more time.

  • The first thing you should consider is whether you’re paying your debts on time. Even paying a few days late can affect your status.
  • Although keeping your creditors informed if you are having difficulties won’t improve your rating, negotiating a payment schedule is a positive step. Over time, as you settle the outstanding balances, this should reflect positively on your credit status.

It’s important to remember that any overdue account will negatively affect your credit rating. Paying it off or closing it doesn’t make your payment history go away and information about your payment history can stay on your record for two years and more.

Your credit rating is based on information found in your credit report including your payment history, what is owed, activity, how long you’ve serviced an account, judgements and defaults and enquiries about your credit worthiness.

Bear this in mind when thinking about your financial priorities, a poor decision today made under stress during a difficult time, could have long-term implications on whether you are able to access credit and other financial services in future. Knowing your credit rating  is an important part of keeping check of your financial health.


Pulse is a FREE financial wellness tool that allows you to check and improve your credit rating.

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DirectAxis is a business unit of FirstRand Bank Limited, an Authorised Financial Services and Registered Credit Provider, NCRCP20. Direct Axis SA (Pty) Ltd, Reg no. 1995/006077/07, an authorised Financial Services Provider, FSP7249 & FSP5. 108 De Waal Road, Diep River 7800.

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Loan repayment terms range from 24 to 72 months. The maximum interest rate with regards to a DirectAxis Personal Loan is 24.50% per annum (compounded monthly). Your rate and initiation fee will be determined according to your personal risk profile.

An illustrative example of a loan at an interest rate of 24.50% per annum would be: Loan amount R50 000 plus a once-off initiation fee of R1 207.50 and a monthly admin fee of R69.00, over 72 months.

The total cost of the loan will be R 103 155.57 which is a maximum Annual Percentage Rate (APR) of 27.76%.