The three digits that represent your credit score reflect some of the most important financial information about you. Yet, most South Africans don’t know their score or how to manage or improve it.
Your credit score is an indicator of financial reliability. Lenders use it to determine whether you qualify for credit or other financial products, and the interest you will be charged.
Gavyn Letley, Product Head at specialist loan provider, DirectAxis, explains that a strong credit score creates opportunities, while a poor one limits them and increases borrowing costs.
For example, a score of over 650 gives you an 85% chance of getting a home loan or vehicle finance approved. A score of 700+ can mean you pay prime or below-prime interest rates, while a poor credit score could mean paying prime +3%, which considerably adds to the cost of a 20-year home loan.
Yet, according to the credit bureau TransUnion, the average credit score in South Africa in 2025 is 612, with only 42% of consumers having a ‘Good’ to ‘Excellent’ credit rating. Meanwhile, 41% of credit-active South Africans are considered high-risk borrowers.
It’s not just credit providers who check your credit health before deciding if and how to do business with you. A poor credit score can potentially lead to a landlord rejecting a rental application or charging a higher deposit.
People with higher scores may pay lower insurance premiums. Cellphone providers and companies that require deposits can offer better terms if you have a good credit history. Similarly, many employers consider candidates’ credit scores as an indication of trustworthiness and reliability, particularly for financial or sensitive roles.
In South Africa, most credit bureaus use a credit score range of 0 to 999. The widely accepted bands are:
• 0 – 527 → Poor – High risk. Lenders may decline credit or charge very high interest rates.
• 528 – 602 → Below Average. Some credit may be available, but often with stricter terms or higher costs.
• 603 – 649 → Average / Fair. Moderate risk. Possible to access credit, though not always at favourable interest rates.
• 650 – 699 → Good. Low to moderate risk. Generally, qualify for credit at reasonable terms.
• 700 – 999 → Excellent. Very low risk. Strong chance of credit approval and best available interest rates.
Your credit health is important, but how do you gauge your condition, and what can you do if the prognosis is poor?
Pulse provides a credit rating – poor, getting there, good or excellent – which is easier to understand than a three-digit score. It also explains how the rating is calculated, tracks it over time, and provides information about what you can do to improve it.
Look for anomalies: Credit bureaus occasionally make mistakes. By regularly checking your credit rating, you’ll see a sudden drop that may indicate something is wrong. If that happens, you can contact a credit bureau to find out if it is legitimate or an error.
Another possibility is that someone is using your personal details illegally, opening accounts or borrowing money in your name. The sooner you find out about this, the faster you can react and minimise any damage.
Letley says a common misconception is that regularly checking your credit rating using online tools can negatively impact your credit profile. While some ‘hard’ credit checks, such as in-depth checks by banks, affect your score, tools such as Pulse don’t.
Take control of your credit health: Regularly checking your credit profile will enable you to see what is influencing the rating and help you understand how to improve it.
Your payment record significantly influences your score. If you’re paying instalments, set up a debit order, so you don’t forget or miss a payment. You can also use the FNB App to schedule payments, making it easier to stay on track. Alternatively, put a reminder in your diary or calendar.
If an account is overdue, it will negatively affect your score. Making some payments or paying it off completely won’t clear your credit record but it will certainly improve it. Closing an account won’t erase your payment profile. It will still be reflected in your credit score. This information can remain on your record for five years.
To improve your score, prioritise clearing debt and try to repay credit with the highest interest rates first. Limit revolving debt, such as credit cards.
“There are lots of reasons people don’t check their credit health – they think it’s too difficult or they fear what they might find. The reality is that with free online tools available, it’s quick and easy to do and knowing your score puts you in a better position to maintain or improve it,” says Letley.
Gwen Bosman
Soweto Sunrise News
