Everything You Need to Know About Credit Scores in SA

Your credit score is an important measurement of credibility in whether you can get a home loan, car loan, or any other type of loan. As such, it’s important to know everything there is to know about credit scores in South Africa.

Luckily, you’ve come to the right place – in this article we’re going define, dissect, and dispel everything there is to know about credit scores.

Let’s start our journey with learning what exactly a credit score is.

What is a credit score?

In a nutshell, a credit score is a big number above your head that tells the bank how much of a risk you are. Your credit score is, as it says, a score that is calculated using several parameters that determines your chances of obtaining approval on loans.

You may be thinking, “what are these parameters used in calculating my credit score?”, well – that’s exactly what we’ll be discussing next.

How is credit score calculated exactly?

A credit score is calculated by the credit bureau compiling a record of your personal credit transactions, and then using some math to calculate a score based on the following:

• Your amount(s) owned.
• Your debt repayment history.
• How long your accounts have been open.
• How much of your available credit you’re using.

Additionally, the credit bureau will also check whether there is a history of you not honouring a debt obligation that resulted in bankruptcy or a judgement against you.

What is the average credit score in SA?

The average credit score in SA is 583 – 613. Most credit bureaus in South Africa rate your credit score on a scale between 300 and 850. In order for the bank to even consider a vehicle or home loan application, you need a credit score of at least 600.

Here’s a detailed breakdown of credit score brackets:

• Below 618: Very poor
• 618 – 633: Below average
• 634 – 649: Average
• 650 – 669: Good
• 670+: Excellent

How can I find my credit score?

To find your credit score, you don’t need to grab a calculator and do some extensive math. All you need to do is find a free app that calculates your credit score for you. Clear Score is a great, free option that gives you your credit score and history.