Fixing your credit score in South Africa is essential for unlocking better loan deals, lower interest rates, and greater financial freedom. With more than 16 million adults still outside the formal credit system, understanding how to improve your credit rating can help you access affordable credit and build long-term financial health.
Understanding Your Credit Score
In South Africa, credit scores range from 300 to 850, with higher scores reflecting better creditworthiness. Scores above 680 are generally regarded as good, while anything above 767 is considered excellent. These scores are calculated by credit bureaus like TransUnion, based on your credit history, payment behaviour, debt levels, and other factors such as court judgments or defaults against your name. Lenders use these scores alongside your debt-to-income ratio to decide whether to approve your credit applications and determine the interest rates you qualify for.
Interestingly, new scoring models like the TransUnion Telco Data Score now use mobile phone usage data to help millions of South Africans, especially those new to credit or without formal credit history, gain access to finance. This innovation is particularly impactful for young adults under 25, many of whom are entering the workforce and need credit to establish themselves financially.
Steps to Repair and Improve Your Credit Score
There is no quick fix to repairing your credit score; it takes patience and consistent financial discipline. Start by obtaining your credit report regularly—ideally every quarter—to check for inaccuracies or fraudulent activity. South African platforms like the RCS Credit Gateway allow you to access your credit report for free, making this easier than ever.
Focus on paying all your bills on time, as late or missed payments have a significant negative impact. Strategically tackle your debts by prioritising high-interest loans first to reduce overall interest paid, or alternatively, pay off smaller debts first to build momentum. Keep your credit utilisation low by not maxing out your credit limits and avoid closing old credit accounts, as a longer credit history improves your score.
Limit the number of credit applications you make within a short period, as multiple applications can signal financial distress to lenders. Instead, apply only for credit you genuinely need and can afford to repay.
Additional Considerations for 2025
Recent data shows South Africa’s credit market is expanding, supported by eased interest rates and improved lending conditions. Banks remain well capitalised, and nonperforming assets are expected to decline, which bodes well for consumers managing credit responsibly. As credit becomes more accessible, maintaining a healthy credit score will be key to benefiting from these favourable conditions.
Moreover, with innovative credit scoring methods incorporating alternative data, more South Africans—especially the financially excluded—have the opportunity to build credit profiles and improve their scores. This could unlock approximately R173 billion in new credit opportunities, enabling more consumers to participate in the economy.
In summary, improving your credit score in South Africa involves regular monitoring, timely payments, strategic debt reduction, and responsible credit usage. Leveraging new tools and understanding how lenders assess credit can empower you to repair your rating and secure better financial outcomes in 2025 and beyond.
