Your credit score is a measure of your overall ability to pay back your loans, credits or obligations. The credit bureaus or the financial lending institutions calculate the credit score for you after acquiring credit information from your credit history, reports or other credit-related transactions. The credit score ranges for South Africa are from 330 to 850. Higher your credit score, higher is your perceived creditworthiness.
There are different classifications or ways to group the credit scores. However, there is the little difference the credit score range or the classification of the credit scores. If you have a score that is 750 or above, it will be considered excellent, if your credit score is between 720 and 749 it falls into the category of very good credit and if your score is in the range of 680 to 719 then it will be considered a good credit score.
The credit score is one of the things that will be considered by the banks or other financial lending institutions when you apply for a loan or credit. A higher score will show that you have managed your debts and loans properly in the past, and the default risk is low with your loan request.
What is a credit score in South Africa
Get to know more about the credit score system in South Africa by reading the information below.
There are a lot of ways on how you can monitor your credit score in South Africa, for you to be able to know where you stand when applying for a loan or credit. Below are the two most trusted financial companies where you can monitor your credit score easily.
TransUnion
TransUnion offers different benefits for their members. This, of course, includes unlimited access to the credit score under the TransUnion. They also offer a 24-month view on your accounts, where you can change your payment habits.
Experian
Experian also offers different benefits, such as credit advice for its consumers and solutions on credit management. You can also monitor your credit score on their website, which is beneficial for you.
How are credit scores calculated in South Africa
In South Africa, the consumer as well as commercial credit information. This score is calculated by using various factors. Higher the score, lower is the risk of lending to the client. Most of the credit score models range from 300 to 1000.
One of the most important variable in calculating the credit score is your payment history. It shows whether you have paid your obligation on time or not. The total length of time that you have held credit also plays a significant role in your credit score. Another important variable that is used for calculating the credit score is the number of applications you have made for acquiring loans. It shows your need or desperation for a loan.
All of the variable mentioned above along with some other data from your credit report is gathered to give you a credit score.
Explanation of credit score ranges in South Africa
The credit score in South Africa is usually from 330 to 850. Get to know the explanation of credit score ranges by reading the information below.
Your credit score will highly depend on the history that you have when it comes to handling your finances. Some people tend to forget that knowing their credit score is essential, for them to get updated. Here are some of the information that you need to know about credit score.
Poor to Sub-Prime
A poor credit score ranges from 619 and below, while a sub-prime is from 620 to 679. Getting loans and applying for credit cards may be difficult because of the small credit score. Interest rates may be high as well with people with this credit score.
Good to Excellent
A good credit score ranges from 720 to 749, while an excellent one is 750 and above. Lenders easily grant loans to people with this credit score because they are considered as low risk.