Good credit score is king
For many years credit score has affected people’e lives in plenty ways (e.g failing to apply for a house or car for instance) and they hardly acquire knowledge on how to improve their credit scores to increase their chances of applying for credit. It has been proven that South Africans spend about three quarters of their incomes on settling their debt and most of them struggle to meet their daily needs. Vernon Pillay has come to the rescue by mentioning that there are ways to positively manage debt to build a strong credit score which can be life changing for most South Africans which was the aim of the article (to enlighten people of course…). Ayanda Ndimande who is the Strategic Business Development Manager in the Retail Credit department at Sanlam said that credit can empower us to reach our personal goals such as purchasing a home, paying for your child’s tertiary education, or starting a family business for the current generation and possibly for future generations which will result in generational wealth for the entire family. Managing credit is an ongoing process and people should attempt to pay a certain amount for their debts, instead of not paying an amount at all.
For those who do not know a credit score is a calculation of an individual’s credit history and considers the FICO model (calculated as follows: payment history 35 %, amount owed 30%, length of credit 15%, credit mix 10%, and new credit accounts for 10%). Things which impact your credit score negatively includes paying debt at a later stage, maximising the credit facility and taking on a lot of debt during a short span. Firstly individuals are encouraged to pay debts on time (debts can be paid before the scheduled date as well). Secondly they should consider their credit utilisation ratio. Thirdly they should know what they can afford and take out credit which needed and affordable in terms of paying it back, and arrangements should be made with creditors on premiums you can afford to be paid on time which is calculated due to the period given of paying the debt.
Lastly those who have been employed recently and they want to start their credit journey, they can start off small by applying for a cell phone contract. Bottom line is that communication is a key factor if you cannot afford your premiums by negotiating to avoid an awful credit score.
#Improving your credit score
#Affordability
#Negotiating
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