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Learn More about Credit

Take charge of your credit accounts.

Most people tend to think of credit as a “bad thing”, but actually, credit forms part of your financial power. It helps you to buy the things you need now, based on your commitment to pay for it later. When you have a good credit record, your chances are higher to qualify for loans when you need them. A higher credit score can possibly secure your loan at a lower interest rate, whereas a bad credit score can mean a rather high interest rate.

Good and Bad Credit

Learn the difference between good and bad credit.

Articles

View informative articles to help you manage your credit.

Loan Safety

How to spot a loan scam.

Quick Tips

How to improve your credit score.

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How to Spot a Loan Scam

Over the past couple of years, loan scams have tricked thousands of people into losing their money. Don’t fall prey to scammers. Here are a few handy tips to help you spot a loan scam:

  • Check if the email or SMS contains spelling mistakes and bad grammar – if it does, it is probably a scam
  • Beware of generic messages that start with “Dear Client”, for instance. Most legitimate companies will personalise their communication with something like “Dear Mrs Soap”
  • In the case of an email, check that both a street address and a legitimate landline telephone number are provided
  • Check the website of the company offering the loan to determine if they are trustworthy or not
  • Legitimate loan companies will always enquire about your credit history
  • Be aware of an interest rate that is clearly too good to be true – like 4% or a R200 flat fee
  • Reliable financial institutions will never ask for an initiation or administration fee up front – this is yet another characteristic of a loan scam

If you’re still unsure if you’re potentially being scammed or not, speak to your financial adviser before following through on the loan application.

Good and Bad Credit

The difference between good credit and bad credit often comes down to what you need vs. what you want – and it’s often splurging on the things you want that creates the problem. As a rule of thumb, it’s never a good idea to use credit for luxurious activities; long after the joyful festivities are over, the debt will continue to keep you in its stranglehold.

When obtaining credit, try to avoid bad credit as far as possible, and invest in good credit – finance solutions that will have lasting good results.

Good Credit

Money spent on items that increase in value or lead to a financial gain.

  • Home improvements to increase the value of your house
  • Education to build a better career
  • A new and reliable car to ensure the safety of your family

Bad Credit

Money spent on items that decrease in value, especially when they come with high interest rates.

  • Luxury items
  • Expensive holidays
  • Big events such as a wedding or birthday
  • New clothing and fancy cars

How to Improve Your Credit Score

Your credit score takes account of all your debt and if or how you pay your bills. It’s essentially the bank’s way of putting a number on your reliability. Credit providers use your credit score to determine how risky it would be for them to take you on as a client – and a low credit score can result in rejection or a high interest rate. Here are a few tips for improving your credit score:

Credit providers will check your credit payment history to see if you have paid your debt instalments on time every month. Check if there are any instalments which you haven’t been paying as you are supposed to and start paying them in full every month.

Try to establish a healthy balance of credit accounts so you can build a strong credit history. A healthy balance can include credit accounts with stores, a mortgage agreement and service contracts. Remember to set reminders for yourself to pay your instalments on time.

Commit to paying off all your accounts that are in arrears. Make it your goal to spend less than 30% of your credit limit in order to avoid spending money you don’t have. You can also take the necessary steps to pay all your outstanding debt so that any negative information can be removed from your credit report.

Check your credit reports regularly and make sure there aren’t any negative issues that are dragging your credit score down. Look out for things like a court judgment, where a court issued an instruction to you to pay an outstanding debt amount, or an old issue that’s been resolved but still appears on your report.

Only apply for new credit accounts when needed. Too many applications for credit accounts in a short period of time could indicate a major change in your financial situation. This could discourage credit providers in taking you on as a client.

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