How Can You Improve Your Credit Score to Get the Desired Loan? Time to Learn the Steps!

Maintaining a good credit report is essential if you are looking for credit in the future.

00:45 25 June 2024

Most people do not properly understand credit scores, which are highly dependent on how you repay your loan. Maintaining a good credit report is essential if you are looking for credit in the future.

To build or improve credit records in South Africa, you must be classified as having a good credit standing of at least 680. It usually depends on how you are managing the debt. So, let's get to know what the intelligent moves are to improve our low credit score.

1. Apply for a loan 

To improve your credit score in South Africa, you must apply for a loan or credit card first. It would show the creditors how you will manage and handle the loans. There are different types of loans that you can consider, and they are a good indicator of your financial skill management. You can keep a mixture of retail credit cards, home loans, cell phone contracts, and more to improve your credit rating. 

1. Settle your credit

The most crucial factor is to settle your credit on time, which affects your credit score. Usually, creditors provide a repayment or grace period to clients who do not procrastinate and wait for the due date. It is a significant criterion that creditors prefer generally, where the bill is paid before the due date. 

1. Check the credit rating

You must continuously check your credit rating or get a credit report to identify whether there is any unsettled debt. It will also reveal information with your name under any negative remark, which can affect your credit history. Also, there is a separate loan for blacklisted.

1. Try to pay a little more

Pay the minimum monthly amount your credit card requires before settling down. This can hurt your credit score, so always pay more than the minimum—which includes the principal and the interest rate—before the due date. This will help make the payments more accessible and increase your credit score. 

1.  Avoid maxing out the credit limit

Every credit card has a credit limit; you should not max it out; otherwise, your credit record will be affected. If creditors identify you as someone unable to pay on time, they won't agree to lend you money the next time. Also, you will default on your debt if you borrow more than your monthly income. 

 

1. Keep accounts that have good credit standing

The age of the credit account is also significant; the longer you maintain it, the better, especially in the case of good credit standing. You cannot start with a clean slate by simply closing the credit account as a wrong account or a credit history takes more than a year to get removed, and within this period, you won't be able to get a proper loan or credit.

Summing it up

Always be careful when you are applying for a loan. The frequency of loans you apply for also affects your credit score in South Africa. So, you can browse https://www.swiftbanker.co.za/ to understand your financial situation and when you should apply for a loan.