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Credit myths: debunked

We clarify some of the most common misconceptions about credit scores and reports.

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Check your credit score today

See your credit score in minutes. It’s free, forever.

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Understanding the world of finance can be confusing at the best of times. And unless you’ve done your research, credit reports and scores can be a bit baffling too.

This isn’t helped by the different rumours which continue to surface about credit scores. Here, we demystify some of the most common myths to help you understand your credit score and report a little better

Credit scores allow lenders to judge whether you are suitable for credit, using information about your previous borrowing and repayment history. If you’ve never borrowed, or only borrowed a small amount of money, then it’s harder for lenders to judge your habits. This uncertainty can unfavourably affect your credit score.

However, borrowing so much money that you will not be able to meet the repayments may also negatively affect your score. This is because lenders may think you’ll struggle to pay back any new debts.

It’s important to strike a balance with borrowing, proving that you can borrow money and then repay it, staying in control of your finances.

Your credit score will almost certainly change over time. Credit scores are based on your financial repayment history and personal information. So if this changes (e.g. if you take out a new credit card or change addresses) your credit score might do as well.

Having frequent access to your credit score and report puts you in the best position to manage your financial wellbeing. Checking your score regularly means you can keep an eye on the change.

Wrong. When you pay your balances in full, you are proving that you can afford your credit, which can have a positive impact on your credit score. Lenders offer the best deals to consumers who have good credit scores and have proved that they can repay their credit.

Having multiple credit accounts open, even ones that you don’t use, can damage your credit score. In this case it’s all about balance – not having too few or too many accounts open at one time.

Having lots of open credit accounts shows lenders that you have access to a large amount of credit (even if you don’t plan on using it). Lenders like borrowers to live within their means, so if you have multiple lines of credit open it may affect the products you’re offered. At the same time, some lenders may like to see diversity in the number and types of credit accounts you have open.

There is no such thing as a credit ‘blacklist’. When you apply for credit, your financial history is taken into account, and decisions are made based on your repayment history and your current levels of money owed.

However, these decisions are not permanent and every financial institution has its own criteria used to determine whether to accept an applicant based on the information in their credit report and their credit score.

Generally speaking, information about your financial history will stay on your credit report for around 6 years.

If you have never borrowed credit before then it’s difficult for lenders to assess how reliable you are. This can negatively affect your score and consequently the financial products you’re offered.

Your credit score assesses you individually. The financial situations of your family (or friends) will not affect your score.

Every credit bureau has different criteria but there are some universal, practical things you can do to improve your credit information. These include making sure all your accounts are registered to the correct addresses, paying bills on time and only keeping and opening lines of credit you need and use open.

You can read our article about boosting your credit score for our top tips.

Having free and easy access to your credit score and report allows you to take control and manage your financial situation better. ClearScore is working hard to ensure that everyone in South Africa can take control of their credit report and score and protect their financial wellbeing.


Frankie takes the often confusing world of finance and makes it clear and simple, to help you get your money sorted.