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.
Register for your free Sanlam Credit Dashboard.
Learn the difference between good and bad credit.
How to spot a loan scam.
View informative articles to help you manage your credit.
How to improve your credit score.
The COVID-19 lockdown has unfortunately become an opportunity for criminals to defraud innocent people who are experiencing financial stress. One such scam is an offer of low interest loans in return for a “small administration fee”. Once the fee is paid, the scammers disappear, leaving you out of pocket.
So, look out for suspicious emails and messages, and watch out for scam artists who claim to be affiliated with Sanlam. Before you open an email or SMS, ensure that the sender is someone you trust and that you recognise the email address or phone number. Should you receive a loan offer, investment opportunity, or any piece of Sanlam communication that makes you feel uneasy, please contact our customer care team or report it to your local police station.
Buying on credit is certainly convenient, especially when you don’t have available funds, however, too much debt can lead to rather severe consequences.
To take out a personal loan might mean the end of your financial problems. Allow us to advise you on how to manage your money wisely.
All your debt might have you feeling emotionally drained. It’s time to tackle your debt proactively and to start managing it productively.
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.
Money spent on items that increase in value or lead to a financial gain.
Money spent on items that decrease in value, especially when they come with high interest rates.
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.
Register for your free Sanlam Credit Dashboard to ensure that your credit report is accurate.
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.