How Credit Scores Work in South Africa

Unlike the US which has a single FICO score, South Africa has multiple credit bureaus (TransUnion, Experian, Compuscan, XDS) that each calculate their own version of your credit score. Lenders may check one or all of them.

Credit scores in SA typically range from 0–999 or 0–700 depending on the bureau's model. A score above 600–650 is generally considered "good" for most lenders.

What Affects Your Credit Score

1. Payment History (Most Important)

Paying every account on time, every month, is the single most powerful thing you can do. Even one missed payment can drop your score significantly. Late payments are recorded and remain on your record for up to 2 years.

2. Credit Utilisation

The percentage of your available credit you are using. If you have a R50,000 credit card limit and are using R40,000, your utilisation is 80% — which is considered high. Aim to keep utilisation below 30–35% on revolving credit accounts.

3. Length of Credit History

Older accounts in good standing improve your score. Don't close your oldest credit account even if you don't use it often — its history helps your score.

4. Number of Recent Credit Applications

Every "hard inquiry" (when a lender checks your credit to approve a loan) temporarily lowers your score by a few points and stays on your record for 12 months. Applying to 5 lenders in one month sends a red flag. Use comparison platforms that use "soft" inquiries first.

5. Adverse Listings

Judgements, administration orders and debt review listings seriously damage your credit score and remain for 5 years. Paid-up defaults remain for 1 year. These must be addressed before lenders will approve new credit.

Practical Steps to Improve Your Credit Score

Step 1: Get Your Free Credit Report

You are entitled to one free credit report per year from each bureau under the National Credit Act. Visit TransUnion, Experian or Compuscan directly, or use services like ClearScore (free, powered by Experian) to monitor your score.

Step 2: Dispute Any Errors

Errors on credit reports are more common than people realise. Check for incorrect account balances, accounts that don't belong to you, and paid-up debts still showing as outstanding. Dispute errors directly with the bureau — they must investigate and correct within 20 business days.

Step 3: Pay Off Outstanding Balances

Prioritise accounts showing as overdue. Negotiate settlement agreements if you can't pay in full — a settled account is better than an outstanding one. Get written confirmation of settlement and ensure the bureau is updated.

Step 4: Set Up Debit Orders for All Accounts

Never miss a payment again. Set up debit orders for at least the minimum payment on every account. Missed debit orders should be tracked and covered manually if your account has insufficient funds on debit day.

Step 5: Reduce Credit Card Balances

Bring your credit card utilisation below 30%. If you have a R20,000 limit, aim to keep your balance below R6,000. This alone can significantly improve your score within 2–3 months.

Step 6: Be Patient — Improvement Takes Time

Negative information takes time to fall off your record. A late payment from 18 months ago still affects your score today. Consistent positive behaviour (paying on time, reducing balances) compounds over 6–24 months.

Business Credit Score Tips

Your business has a separate credit profile from your personal score. To build a strong business credit profile:

• Register your business with CIPC and open a dedicated business bank account
• Apply for a small business credit card or overdraft and use it responsibly
• Pay all trade creditors on time (suppliers may report to bureaus)
• Ensure your business banking history shows stable, growing revenues