Here’s the thing, credit providers want to see how reliable you are at managing credit. They do this by checking if you repay your debt and what your history of financial contracts look like, all that is set out on your credit record. So if buying that first car or home requires credit, you’ll need a credit record to prove you can manage your money.
With a record that shows you manage debt well, you are more likely to have a larger loan application approved and with lower interest rates. So, the earlier you establish a sound credit record, the better.
Easy ways to build it
Apply for credit: A Capitec credit card is a good start – you are eligible as long as you are over 18, can offer a proof of address and earn a minimum of R3 000 from a regular source. The bank will give you a credit limit that you can afford to repay based on your other expenses. If you provide the correct paperwork, it is issued immediately.
Open a retail account: Opening an account with a reliable retailer will also help build your credit record, but only if you pay your installments on time. Cellphone accounts are another good option.
Utility bills: Try to get bills for water, electricity, rates, fixed landlines, etc. in your name to help build your record.
Make it manageable: It will reflect badly on your credit record if you apply for too many credit lines at the same time, or too often. Having just a few, manageable credit lines from reliable institutions can provide creditors with a good indication of your ability to service debt. Make sure that you budget to repay all your debt each month.
Pay on time: To build a good credit rating you need to pay your debts on time.
Don’t max out your credit: Try not to use the maximum amount of credit available to you. Rather keep your credit balance to about 25% to 50% of the overall limit and repay it on time. This shows that you manage debt sensibly.
Consolidate debt: If you already reached your spending limit and have debt, consider applying for a Capitec personal loan. You can then repay various credit lines through a single and manageable loan repayment. Capitec offers unsecured loans with affordable interest rates.
Savings account: Putting money in a savings account each month will show creditors that you have financial discipline and think ahead. The money will also gain interest. It’s possible to have credit and save at the same time, and it helps your credit record. Check out Capitec’s Global One savings options.
Monitor your credit rating: You can check your credit rating on our app for free.