When it comes to buying a house or car, a bank would consider both your affordability and your credit score. Your affordability will determine how much the bank will lend you, but your credit score determines your interest rate, or whether the bank will even lend to you at all. Having an excellent credit record and qualifying for a better interest rate could save you tens of thousands of rands.
There are five factors that influence your credit rating. It is important to note that your personal information such as your employer, age, address, and demographics have no bearing at all on your credit score.
MONEY LENDERS LOOK AT THESE FIVE FACTORS
• these are defaults (when you are • a 24-month history of all your payments. This shows whether you made your payments on time, whether you were late or didn't pay at all. If you miss payments, this will impact your credit rating. • the number of enquiries by credit providers over the last 12 months. An increase in enquires could negatively affect your score. • the types of credit that you have, including secured and unsecured credit. This includes store cards, credit cards, vehicle finance and home loans. It also includes your credit usage. Using up all your credit lines could negatively affect your rating. • the length of time that you have been actively using credit. The longer your history, the more positive for your rating.
