How to Have a Spotless Credit Score (South Africa)

By Tevait Feanle •  Updated: 02/19/24 •  5 min read

Ah, the lender’s ideal- the person with a perfect credit score! For those of us struggling with a soft economy and rising cost of living, it seems like an impossible goal. In many ways, it is- people with the highest possible credit score are few and far between if any exist at all. However, you can still have a fantastic credit score that practically guarantees lenders will want to throw money at you without reaching the highest possible score. Today we will show you how.

- ADVERTISEMENT -

How to Have a Spotless Credit Score (South Africa)

In South Africa, the highest credit score you can have is 850. Aiming to boost your credit score all the way is a worthy goal. In honesty, however, you are unlikely to achieve it- and you don’t have to! Credit scores over 800 are considered excellent, and represent the best of the best lending behavior over a long time. If this is you, give yourself a gold star! The credit world is your oyster. Anything over 700 is counted as ‘very good’, and will mean you can get favorable interest rates and access to almost all the credit you could want. 

So how do you get to these spotless credit scores? It boils down to excellent credit behavior. It isn’t a quick or one-time process, either. It will have to be maintained over a very long timeline. Ideally 5 years. That means keeping a variety of different types of credit, both long- and short-term, open. Long-term debt well managed is a major score booster, like your mortgage.

Credit should be used (no 0 balances), but not too much. Ensure you never make a late payment, go over your limit, or default on a loan. Then there is the thing that few people realize- you also have to be actively using that credit while meeting all those benchmarks! If you pay off all your lines of credit and never use them again, your credit score will also drop. Paying off the balances in full within 30 days (typical, and prudent, financial advice) also won’t count. The credit bureaus see that as ‘cash’ spending behavior, not real credit usage. Plus, higher credit scores go to those who have some credit, not no credit.

As you can see, a spotless credit score doesn’t entirely overlap with having excellent financial ‘hygiene’ or being debt-free. You could have millions in the bank and no credit score at all because you have bought everything in cash! It’s also near impossible to keep, and maintain, that sweet spot over long periods. However, keep those benchmarks in mind and do your best to meet them. You will soon see a positive impact on your credit score.

How to Clear Your Credit Score if You Want to Buy a House

Then there’s the matter of bad credit. How do you improve your credit score if you want to buy a house, or make another major credit purchase?

It will start by looking at your credit report with each bureau in depth. Carefully note every entry. Is something wrong, has a mistake been made, and is there any fraudulent activity that isn’t you? These matters can be disputed, and should then be removed from your report. Now, work on clearing your outstanding debts, resolving any legitimate defaults or judgments, and otherwise tidy up your report.

- ADVERTISEMENT -

Next, how well are you using credit? Ensure you are paying your installments like clockwork every month. Don’t go over your credit limits, or let an account default. Take steps to bring your credit utilization (how much of your balance you have used) under 50%, and above 30%. If you aren’t already using a variety of types of credit, you may need to open and scrupulously maintain a few more. 2 credit cards, for example, will have less of a positive impact on your score than a credit card and a car loan. Even if you use them meticulously. 

With time and patience, this will gradually improve your credit score. Typically, you need a credit score of at least 640 to be granted a mortgage. Ideally, try to get it to 700 or higher to unlock better rates and boost your chances of approval.

How Long Does it Take to Fix Bad Credit in South Africa?

How long it takes to fix bad credit in South Africa depends on how bad it is. If you have sunk into the 300 range on your credit score, and have no obvious defaults or errors, it’s going to take a long time to rehabilitate. If you are at the national average of 560, raising it will be quicker. 

In general, it takes about 3 months for improved credit behavior to have a positive impact on your credit score. It will keep rising further with time if you keep up the good work.

How Long Does Bad Credit Stay on Your Record in South Africa?

How long any item on your credit report- good or bad- has an impact on your credit score depends on what that item is. These times are dictated by the National Credit Act in South Africa, and are called ‘retention periods’. Serious items like court judgments will remain on your record for 5 years. Even if it is resolved or paid, the impact will remain for the full retention period. Defaults, which are less severe, will remain on your report for 1 to 2 years, as will rescinded judgments. Payment history is updated every 30 days, with 12 months of data shown. Credit utilization is also updated every 30 days, and the previous month’s data falls away immediately. As a rule of thumb, the worse the behavior, the longer it will impact your report. A missed payment will have a small impact, whereas a judgment has a massive one. 

Trying to get the highest credit score possible is a solid financial goal, and it all starts with managing your credit smartly. We hope these tips will help.

- ADVERTISEMENT -

Keep Reading

Where to Check Your Credit Score as a Foreigner

Where to Check Your Credit Score as a Foreigner

With so many foreign nationals contributing positively to our society, this is a rather important question. Today we are here with all the answers. 

How Long Does it Take for a Credit Score to Update?

How Long Does it Take for a Credit Score to Update?

Today we take a closer look at credit score timelines and when you can expect to see those changes work their magic for you.

How Bankruptcy Affects Your Ability to Secure Credit

How Bankruptcy Affects Your Ability to Secure Credit

Ultimately, we will understand the ability to secure credit and how long bankruptcy can affect your credit.

Which Subscription Will Build Your Credit Score In South Africa?

Which Subscription Will Build Your Credit Score In South Africa?

Subscriptions will not universally count towards building your creditworthiness. Let’s take a look in more depth.

How Long Does A Judgment Stay On Your Credit Report In South Africa?

How Long Does A Judgment Stay On Your Credit Report In South Africa?

Today we will walk you through everything to know about judgments and your credit score, including how long a judgment will stay on your credit report. 

Why is my Credit Score Not the Same as Other Credit Bureaus?

Why is my Credit Score Not the Same as Other Credit Bureaus?

Today we will dive a little deeper into why credit scores can vary between credit bureaus, and why you don’t need to worry too much about that variation

How Does Your Credit Card Impact A Credit Score?

How Does Your Credit Card Impact A Credit Score?

Do Multiple Bank Accounts Affect Your Credit Score?

Do Multiple Bank Accounts Affect Your Credit Score?

If you're one of the people wondering if multiple bank accounts affect credit score, we've you covered in this article.     

How to Check Amazon No Rush Credit Balance

How to Check Amazon No Rush Credit Balance

How to Check Amazon No Rush Credit Balance. So buckle up to learn more as you may be on Amazon to apply these new learnings. 

What Credit Score Secures the Best Mortgage Rate?

What Credit Score Secures the Best Mortgage Rate?

Are you wondering about the score for the best mortgage rate in South Africa or how to boost your score before applying? Remain tuned for insightful tricks and info.

How Will Filing Bankruptcy Affect My Credit Score

How Will Filing Bankruptcy Affect My Credit Score

Now let us look at the relation between credit score and bankruptcy. In the end, we should be able to see how filing for bankruptcy affects your credit score. 

What Credit Score Do You Need to Buy a Car?

What Credit Score Do You Need to Buy a Car?

Let us share with you about credit scores and car purchasing. You will be able to understand and know the amount of credit score you need to buy a car.

How Do Student Loans Affect Your Credit Score

How Do Student Loans Affect Your Credit Score

We will share some insight on how student loans affect your credit score and some of the related credit score issues with student loans.

How To Check Credit Score On The Capitec App

How To Check Credit Score On The Capitec App

The post will guide you on how to check your loan rating on the Capitec app, build your readings using Capitec, increase it, and how much advance Capitec can give you.

How to Apply for a Credit Card With Bad Credit

How to Apply for a Credit Card With Bad Credit

Today we will walk you through everything to know about applying for a credit card with bad credit, and how you can improve the situation.