Personal credit actitivity - that is the payment and non-payment of credit accounts - is recorded at the credit bureaus to ensure that organisations are able to access this information when you apply for credit. With stringent lending criteria implemented, you can maintain or improve your credit record and score by applying the following guidelines:
- Pay your accounts on time every month
- Pay the full instalment owed each month
- If you are unable to make a payment due to unforeseen circumstances, talk to the company concerned and make alternative arrangements to pay back what you owe
- Never buy on credit without knowing if you can afford the repayments
- Try to keep credit repayments between 20% and 30% of your income. If you earn R5 000 per month, keep your credit obligations between R1 000 and R1 500 per month
- Stay informed about your personal credit information. Obtain a copy of your credit report at least once a year
- Never lie on an application for credit
- Never ignore a letter of demand for payment. Make a phone call or write a letter to explain your situation
- Never ignore a summons to court for non-payment. This could have a serious reflection on your credit report
Late payments (even if just a day late), a short credit history, high-risk (microloan) accounts, arrears, defaults and collections all reduce your credit score with the credit bureau and if you are to maintain a healthy credit record should be avoided or kept to a minimum.