What is a good/bad credit score?

When it comes to applying for a credit, there’s a vital piece of information that impacts how lenders and banks view you: your credit score. Understanding what makes a good and bad credit score is the first step to being accepted for credit, and getting the very best deals.

A credit score is a three-digit number used by lenders to determine whether you qualify for credit, such as a loan or credit card. Your credit score is based on your credit report, which is a record of your credit history and how you’ve managed your finances in the past. This allows lenders to assess your level of risk when you apply for credit.

Your credit score is calculated by a credit bureau. There are four main credit bureaus in South Africa: Experian, TransUnion, Compuscan and XDS. At ClearScore, we show you your Experian credit score, which ranges from 0 to 740. Each credit bureau is sent information by lenders about the credit you have and how you manage it. Other information, such as court judgments against you or whether you are undergoing debt review, are also sent to the credit bureaus and form part of your credit report.

There is no “magic” credit score that will guarantee that you get accepted for credit. Also, different lenders are looking for different things, so you might get refused credit by one lender and accepted by another.

Remember, your credit score is a useful indication of your creditworthiness, but lenders will look at other factors (such as your income and debt levels) before deciding whether to lend to you.

Below are the Experian score bands and how we refer to them at ClearScore:

There are a number of factors that impact your credit score, including:

There are a number of things that you can do to improve your credit score like paying your bills on time, keeping balances low on credit cards, and paying off your debt. We go into detail about factors that affect your credit score in this article.

At ClearScore, we don’t like to label or judge people based on their credit score. A lower score isn’t a reflection of who you are – it’s simply a snapshot of your credit history at a point in time, and it can change.

In South Africa, lenders generally become more cautious when an Experian score falls into the poor or very poor range. This is typically a score below around 616 on the Experian scale. At ClearScore, these are the “Let’s start climbing” and “On the up” bands.

If your score is in this range, you might notice:

• Fewer approvals right now Some lenders may see you as higher risk, which can make it harder to access certain loans, credit cards, or contracts.
• Higher interest rates When credit is available, it may come with higher interest rates as lenders try to manage their risk.
• More conditions attached You might be asked for a larger deposit, a guarantor, or a shorter repayment period.
• More limited choices The most competitive deals and premium products may not be available just yet.

If this sounds familiar, try not to be discouraged. Many people start here - and with the right steps, your score can improve over time. By building positive habits like paying bills on time and keeping balances manageable, you can move your score in the right direction. We’ll share practical ways to do this later in the article.

Understanding what affects your credit score helps you make better financial decisions. Here are the main factors:

Payment history This is usually the biggest factor. Lenders want to see a consistent record of on-time payments across your credit accounts. Late payments, missed payments, and defaults can seriously hurt your score.

How much you owe This looks at how much debt you have compared to your credit limits, often called your 'credit utilisation'. If you're using most of your available credit, it can lower your score even if you're making payments on time.

Length of your credit history Having accounts open for longer periods shows stability. Be cautious about closing your oldest credit accounts solely to 'tidy up' your profile, as longer-standing accounts can support your score.

Types of credit Having a mix of credit types, like a credit card, store account, and personal loan, can help your score. It shows you can manage different kinds of credit responsibly.

New credit applications Applying for lots of credit in a short time can lower your score temporarily. Each application creates a "hard inquiry" on your credit report.

You have the right to check your credit score regularly, and it's a smart habit to develop. Here's where you can check:

• Credit bureaus: TransUnion, Experian, and XDS offer at least one free credit report per year under South African law, and some provide more frequent updates for a fee.

• Bank apps: Many South African banks now show your credit score in their mobile apps at no extra charge, although availability varies by bank.

• Credit monitoring services: ClearScore provides free access to your credit score and report, updated monthly, with no hidden fees or credit card requirements.

You should check your credit score at least once a year, but monthly monitoring helps you spot problems early and track your progress.

Improving your credit score takes time, but these strategies can help:

1. Pay all bills on time Set up debit orders or payment reminders for all your accounts. Even one missed payment can hurt your score for months.

2. Keep debt levels low Try to use less than 30% of your available credit. For example, if your credit card limit is R10,000, keep your balance below R3,000.

3. Don't close old accounts Keep your oldest credit accounts open, even if you don't use them much. They're helping lengthen your credit history.

4. Pay more than the minimum If you have debt, paying more than the minimum helps reduce your balances faster and shows responsible management.

5. Limit new credit applications Only apply for credit when you really need it. Too many applications in a short time can lower your score.

6. Check your credit report regularly Look for errors or fraudulent accounts and dispute them with the credit bureau immediately.

7. Consider debt consolidation carefully If you're struggling with multiple debts, consolidation might help, but make sure you understand all the terms and costs involved.

Your credit score tells the story of your financial reliability, and understanding it is the first step to taking control of your financial future. With ClearScore, you can access your credit score and full credit report completely free, updated monthly, for life.

Here's what you get:

1. See your credit score and report, always free Access your complete Experian credit report to get a comprehensive view of how lenders see you. Check your score anytime, anywhere, with no hidden fees or charges, ever.

2. Understand what affects your score Get clear insights into what's helping or hurting your credit score. Track payment history, credit utilisation, account age, and recent searches. See exactly which factors are making the biggest impact on your score.

3. Spot errors and opportunities Review your credit report whenever you want to catch mistakes that could be dragging your score down. See all your credit accounts, payment history, and any searches in one place, updated regularly so you're always in the know.

4. Get personalised tips to improve Receive tailored guidance on how to build your score over time. Whether you're starting from scratch or working to improve an existing score, you'll get actionable steps matched to your situation.

Why choose ClearScore for credit monitoring?

• Free forever – track your score and report with no fees, no trials, no catches
• Monthly updates – see changes to your credit report every week, not just once a year
• Experian data – access your official Experian credit report and score
• No impact on your score – checking your own score won't affect your credit rating
• Take control – understand your financial health, and make informed decisions about credit

Your credit score affects everything from mortgage rates to mobile phone contracts. With ClearScore, you can track your progress, spot opportunities to improve, and build the financial confidence to reach your goals.

Check your credit score on ClearScore

What is the average credit score in South Africa?

The average credit score in South Africa is around 612, with about 42% of consumers in the 'Good' to 'Excellent' range. This suggests that many people still have room to improve their scores.

What credit score do you need to buy a car in South Africa?

Many vehicle finance providers prefer applicants with scores above about 650, although some specialised lenders may consider lower scores in exchange for higher interest rates or larger deposits. A score above 700 typically unlocks the best vehicle finance rates.

Can debt review improve your credit score?

Debt review, also known as debt counselling, is designed to help over-indebted consumers restructure and manage their debts under the National Credit Act. While under debt review, your credit report will show this status, which may affect new credit applications. However, successfully completing debt review and having the clearance certificate issued can help improve your score over time.

How does a credit score affect loan interest rates?

Someone with an excellent score may qualify for interest rates that are meaningfully lower than someone with a poor score on a similar loan, but the exact difference varies by lender and product.

How long does it take to improve a credit score?

Some positive changes, such as paying down high balances, may show in your score within a few months, while other factors, like payment history, build gradually. There is no guaranteed timeline for improvement, as it depends on your starting point and the actions you take.

Does checking my credit score hurt it?

No, checking your own credit score is a "soft inquiry" that doesn't affect your score. You can check as often as you like without any impact.

What's the difference between a credit score and a credit report?

Your credit report is a detailed document showing your credit history, accounts, and payment patterns. Your credit score is a number calculated from the information in your credit report.

How can ClearScore help with my credit score?

ClearScore provides free access to your credit score and report, updated monthly. You may also receive personalised tips and alerts about changes to your credit file to help you monitor and manage your credit health, but these do not constitute financial advice.

Your credit score is one of the most important numbers in your financial life, but it's not permanent. With understanding, patience, and the right approach, you can build and maintain a score that opens doors to better financial opportunities. Check your score regularly, make payments on time, and watch your financial options expand.

Ready to take control of your credit? You can check your credit score for free and get personalised improvement tips at ClearScore.

Disclaimer: This article provides general information only and does not constitute financial advice. Individual circumstances vary, and you should seek independent professional advice before making financial decisions. Information is accurate at the time of writing and may change. ClearScore is not a registered financial services provider under the Financial Advisory and Intermediary Services Act (FAIS) and does not provide personalised financial advice.