A good credit rating, otherwise referred to as a credit score, can help to make life so much simpler. Unfortunately, if statistics are anything to go by, fewer and fewer South Africans are managing to keep their credit rating on the healthy side of the spectrum and more and more are finding themselves drowning in debt instead. Below, we discuss the main reasons why a good credit rating is so important, and how to go about giving yours a boost.
Why Your Credit Rating Matters
In general, a good credit score means that you will be able to:
- Obtain a home loan with ease. You will also be likely to land yourself a much better interest rate, as well as be required to pay back smaller monthly instalments.
- Obtain vehicle financing with less hassle. The better your credit score, the lower your interest rates and the higher the potential vehicle financing loan will be, meaning you will be able to purchase the car of your dreams!
- Start a new business. Very few people will have the start-up capital necessary in order to begin a business venture, so they will have no choice but to borrow it. Once again, a good credit rating will make this process easier, and will lead to lower interest rates and smaller monthly repayments.
- Find a great job. You’ll be surprised how many employers will check your credit rating before feeling confident enough to hire you nowadays. There’s no doubt that a less than attractive score is likely to make them think twice about their decision!
How to Improve It
If the goal is to improve your credit rating, be sure to follow these helpful tips:
- See a debt counsellor. Outstanding debt is the main enemy when it comes to maintaining a good credit score. A debt counsellor will be able to help you set up a realistic repayment plan, consolidate your debt and make peace with your creditors.
- Be strict about your credit card use. Using your credit card wisely can actually impact positively on your rating. However, using it too much and missing monthly repayments will have the opposite effect. The general rule of thumb is to use your credit card only for the bigger purchases, as opposed to using it for everyday expenses.
- Don’t worry too much about old debt that appears on your report. It doesn’t have to be a bad thing if you have successfully managed to pay it off.
- Pay your bills on time. Whether it is your clothing account at Edgars or your monthly credit card repayments, make doubly sure that you pay what you owe on time, every time. Late payments will automatically have a negative effect on your score.
Ultimately, keeping your credit rating in good standing is about making responsible financial decisions, as well as doing all that you can to get rid of debt. For professional assistance in this regard, do not hesitate to get in touch with Debt Free with Armani today!