Want to take control of your credit score? Here's everything you need to know about the factors that count

Want to take control of your credit score? Here's everything you need to know about the factors that count.

Credit scores are a complicated business. No-one has a universal credit score. This means there's no rulebook to tell you how many credit points are lost and won with everything you do financially. Instead, we're going to talk about the factors that may affect how lenders view you, and how these, in turn, impact your credit score.

Understanding South African credit score ranges

Before diving into the factors that affect your credit score and report, it helps to understand what the numbers actually mean. In South Africa, the three major credit bureaus - Experian, TransUnion and XDS - each use their own scoring models, which is why your score can differ depending on where you check. ClearScore uses Experian data, but the general bands below give you a solid idea of where you stand across all three bureaus.

Is 620 a lower credit scores score?

A score of 620 sits in the average band on most South African scales. It isn't poor, but it does mean you're unlikely to receive the most favourable rates. Lenders may still approve you for products such as store accounts or entry-level credit cards, yet a home loan at a prime-linked rate would typically require a score above 680. If you're hovering around this mark, even small improvements - like reducing your credit utilisation or clearing a missed payment - can move you into the next band relatively quickly.

Why your score can differ between bureaus

Each bureau collects data from a slightly different pool of creditors and applies its own algorithm. TransUnion may weight payment history more heavily, while Experian might place greater emphasis on credit utilisation. Not every lender reports to all three bureaus either, so one report could show an account that another doesn't. This is perfectly normal - the important thing is to track trends rather than fixate on a single number. Checking your score regularly through ClearScore gives you a reliable, free view of your Experian profile so you can spot changes as they happen.

Applying for credit

Every time you make an application for credit, an enquiry will be carried out on your credit report and a mark will be left on your file.

Making an occasional application for credit won't make much of a difference to your credit score. However, if you make several applications in a short space of time, or if you're rejected for credit, it's likely to have a negative impact on your score.

If you want to limit the number of enquiries on your report, you can check your eligibility for a credit product by carefully reading the criteria before you apply.

TIP: Don't panic if your credit score dips when you've applied for a new credit card. If you start using your new product responsibly then your credit score should go back up relatively quickly.

The age of your accounts

It's no surprise to learn that banks and lenders like to know that the people they lend to are reliable and stable, and therefore can be trusted to repay any debts. One way to determine stability is to look at the age of your credit accounts. So, they like to see that at least one of your credit accounts has been held for several years. This not only proves who you are, but shows you've been trusted by another lender over a long period of time. It's likely to have a positive impact on your credit score if you have an older credit account on there. If your credit accounts are all mostly new this could lower your credit score.

Missing or not paying your debt

Debt management and its effect on your credit score

If you're struggling to keep up with repayments, formal debt management may offer a structured way out - but it's important to understand how it affects your credit score before you commit.

What is debt management and debt counselling under the National Credit Act?

In South Africa, debt counselling (also known as debt review) is a legal process governed by the National Credit Act (Act 34 of 2005). A registered debt counsellor assesses your total debt, negotiates reduced interest rates and extended repayment terms with your creditors, and consolidates everything into a single affordable monthly payment. A DMC (debt management company) typically facilitates this process, distributing your payments to each creditor on your behalf. It's designed to protect consumers from legal action while they work through their obligations.

How does entering debt review appear on your credit report?

Once you're formally placed under debt review, a flag is added to your credit profile at all major bureaus. This flag tells lenders you are currently undergoing debt counselling and, by law, prevents you from taking on any new credit while the process is active. Your score will be negatively affected because the flag signals financial distress. However, it also stops the cycle of missed payments, defaults, and legal judgements that would otherwise cause far greater long-term damage.

How long does the debt-review flag stay on your record?

The debt-review flag remains on your credit report for as long as you are under counselling. Once you've settled all restructured debts, your debt counsellor applies for a clearance certificate. After the certificate is issued and submitted to the credit bureaus, the flag must be removed. In practice, clearance can take anywhere from a few weeks to a couple of months to reflect on your report. From that point, your score begins to recover - though existing negative marks (such as historical defaults) remain for up to five years from the date they were first recorded.

Debt management vs. voluntary settlement - which is better for your score?

A voluntary settlement involves negotiating directly with a creditor to pay a lump sum that is less than the full outstanding balance. The account is then marked as 'settled' rather than 'paid in full,' which still carries a minor negative signal but doesn't impose a blanket credit freeze the way debt review does. Debt review, on the other hand, offers legal protection from creditors and structures every debt into one plan, making it better suited to consumers juggling multiple accounts they genuinely cannot afford. If you owe a single creditor and have access to a lump sum, voluntary settlement may preserve your score more effectively. If you're overwhelmed across several accounts, debt counselling through a reputable DMC is usually the safer route - the short-term score hit is outweighed by the structured path back to financial health.

If you miss a payment or pay late on a debt, this will be marked on your credit report and it's likely to have a negative effect on your credit score.

If you miss several payments your lender may place your account into 'default'. Every lender will have different rules for how many payments you're allowed to miss before you default. Some will allow you to miss up to 6 payments but for some lenders you may only be able to miss 2 payments before you are declared in default.

Defaulting on a payment carries a much heavier penalty on your credit score than missing a payment.

Missing and default payments will be marked on your credit report. Under Regulation 17(1) of the National Credit Act, adverse classifications such as defaults are retained for 1 year, and adverse classifications of enforcement action for 1 year or the period provided in section 71A, and must be removed within 7 to 14 days once the debt is fully settled. Civil court judgements, by contrast, remain on your report for up to 5 years.

Remember, it's never too late to pay back a debt. It will always look better on your credit report to pay down a defaulted account - even if the payment is late and it isn't for the full amount. It will demonstrate to lenders that you've tried to make up for the defaulted payment, and this is always preferable to never paying a debt back at all.

How much of your credit limit you're using

Ideally, you should try to keep your credit repayments between 20% and 30% of your income.

Other factors relating to your credit limit may also affect your credit score and report. For example, if you have one credit card with a relatively high credit limit, this may have a positive effect on your credit score as it shows you're trusted with this level of credit.

Public records: Admin orders, sequestrians, court judgements and bankruptcy

If you have a court judgement, admin order or a sequestrian against you, this information is on the public record and becomes part of your credit report.

If lenders see any of these items marked on your report, it will have a negative impact on your credit score and it's likely lenders will be less willing to lend to you. This is because your record shows you've gone back on some form of financial agreement in the past.

If you do have one of these on your record, make sure you comply with any rules or restrictions you are given. If you ignore what is asked of you, it can have more serious and permanent consequences on your credit score.

Once your debt is back under control, using a credit builder credit card very carefully will help you rebuild your credit score.

Not having any active credit agreements or credit history

How to identify what is hurting your credit score right now

Knowing the factors that affect your credit score and report is one thing - pinpointing which one is dragging yours down right now is another. Follow this step-by-step checklist to diagnose exactly what is affecting your credit score and where to focus your effort first.

• Step 1: Pull your free ClearScore report and look for red flags

• Log into your ClearScore dashboard and review your full credit report. Look for any accounts marked in arrears, defaults flagged in red, or unusually high balances relative to your credit limits. Your timeline view shows exactly when negative events were recorded, making it easy to spot recent damage.

• Step 2: Check for errors or fraudulent accounts

• Scan every listed account carefully. If you see a loan or credit card you never opened, it could be a sign of identity fraud. Incorrect balances, duplicated judgements, or accounts that should have been closed years ago also appear more often than you might expect. You can raise a dispute directly with the credit bureau to have errors investigated and corrected - this may help correct inaccurate information, and your score may change once the bureau updates your record. The result, timing and size of any change vary by bureau and individual credit history.

• Step 3: Rank your negatives - defaults vs. high utilisation vs. hard enquiries

• Not all negative marks carry equal weight. A default or court judgement will suppress your score far more than a single hard enquiry. High credit utilisation (using more than 30% of your available limit) sits in the middle. List each negative item and sort them from most to least severe so you know where the biggest drag is coming from.

• Step 4: Prioritise the factor with the biggest score drag first

• Tackle the heaviest hitter before anything else. If you have an outstanding default, negotiate a payment arrangement - even a partial settlement updates your report positively. If utilisation is the problem, focus on paying down balances below 30%. Fixing one major issue may have more effect than addressing several minor ones, though the outcome varies by bureau, lender and your full credit history.

What is the biggest killer of credit scores?

In South Africa, defaults and court judgements are the single biggest killers of credit scores. A default can remain on your report for up to one year - or two years for certain enforcement listings - and signals to every future lender that a previous agreement was broken. While missed payments and high utilisation certainly hurt, they're recoverable within months if addressed. A default, by contrast, continues to weigh your score down long after the debt itself is settled - which is why preventing an account from reaching default status should always be your first priority.

If you don't have any active credit accounts - i.e. ones that you're currently using - this may have a negative impact on your credit score. The reason for this is that lenders have no current information about your ability to borrow money and repay it reliably, and therefore you may be seen to be a greater credit risk.

If you have no credit history you may struggle to be approved for credit in the first place (a bit of a chicken and egg situation). There are credit cards out there that might be able to help you if you're in this situation - credit builder cards - which, if you use responsibly, could help you build up your credit score.

Key highlights

• Try not to apply for too much credit in a short space of time

• Older credit accounts will help your score and look better in the eyes of a lender

• Always try to make a repayment even if it's late - being in default will have a bigger impact on your score than just missing a payment

• If you have no credit history, you could try carefully using a credit builder card to slowly build up your credit score.

Frequently asked questions about credit scores

How can I improve my credit score quickly?

The fastest wins come from correcting errors on your credit report and reducing your credit utilisation below 30%. Pay down your highest-balance revolving accounts first, ensure all minimum payments are up to date, and avoid opening new accounts while you're trying to recover. In South Africa, these changes can reflect on your report within one to two payment cycles, giving you a measurable boost in a matter of weeks rather than months.

What is the 15-3 rule for credit cards?

The 15-3 rule is a payment timing strategy that originated in the United States. It suggests making a partial payment on your credit card 15 days before your statement closing date, then a second payment 3 days before. The idea is to lower your reported balance at the moment the bureau takes a snapshot, which in turn reduces your utilisation ratio. While the principle of keeping reported balances low is sound everywhere, South African bureau reporting cycles vary by lender, so the specific 15-and-3-day timing may not align perfectly with local processes. The core takeaway still applies: paying more frequently than once a month keeps your utilisation low and signals responsible credit behaviour.

Does the 609 loophole work in South Africa?

The so-called 609 loophole refers to Section 609 of the US Fair Credit Reporting Act, which gives American consumers the right to dispute unverifiable items on their credit reports. South Africa has its own consumer protections under the National Credit Act, which entitle you to one free credit report per year from each bureau and allow you to dispute any inaccurate or outdated information. The mechanism is different - you lodge a dispute directly with the bureau or through your debt counsellor - but the outcome is similar: if an item cannot be verified, it must be removed. There is no secret loophole involved; it is simply your legal right as a South African consumer to ensure your report is accurate.

What credit score do I need to get approved for a car loan in SA?

Most vehicle finance providers in South Africa prefer applicants with a score of 650 or above, though requirements vary between banks and dealership finance houses. A score in the good band (roughly 681-766 on the Experian scale) typically qualifies you for competitive interest rates close to prime. Applicants in the average band (614-680) may still be approved but can expect higher rates or a larger deposit requirement. Below 600, approval becomes difficult through mainstream lenders, although some specialist financiers cater to lower scores at significantly higher cost. Improving your score before applying - even by a small margin - can save you thousands of rands in interest over the life of the loan.