Credit Report and Credit Score in South Africa Explained

Whenever you apply for a home loan, a car loan, a store card or a cellphone contract, the lender checks your credit report. Many landlords and some employers do too. Knowing what is in your report, and keeping it healthy, can save you a lot of money in interest over your lifetime. This guide explains how credit reports and credit scores work in South Africa, how to get your free report, what helps your score and how to recover from a low score.

What a credit report is

Credit bureaus, such as TransUnion, Experian and XDS, collect information from lenders about how you use credit. Your report lists your accounts, your balances and limits, whether you pay on time, recent applications for credit, and any judgments or defaults. From this information the bureaus calculate a credit score, a number that summarises how likely you are to repay. Each bureau uses its own scale, so your score can differ slightly between them.

Why your credit score matters

Lenders use your score to decide whether to lend to you and at what interest rate. On a large loan, a better rate makes a big difference. For example, on a R1,000,000 home loan over 20 years, paying 1 percentage point less interest can save several hundred rand a month and well over R100,000 over the life of the loan. A good score also makes renting a home and getting contracts easier. Our loan calculator shows how the rate changes your repayment.

How to get your free credit report

Under the National Credit Act, you are entitled to one free credit report a year from each credit bureau. Many banks and apps also show your score for free. It is worth checking at least once a year, and before any big application, because mistakes do happen: an account that is not yours, or a debt you have paid still shown as outstanding. You can dispute errors with the bureau, which must investigate and correct wrong information.

What helps your credit score

The single most important factor is paying on time, every time. Even one missed payment can stay on your record. Using only a modest part of your available credit also helps: a card that is always near its limit suggests financial strain. A longer history of well-managed accounts counts in your favour, so think twice before closing your oldest account.

Applying for lots of credit in a short time can lower your score, because each application leaves a record. Shop around carefully, then apply for the product you actually want.

Building credit from scratch

If you have never borrowed, you may have little or no credit record, which can make lenders cautious. A cellphone contract, a small store account or a credit card with a low limit, all paid on time, can help you build a record. Use credit lightly and pay in full where possible.

If your credit score is low

Start with the basics: set up debit orders so you never miss a payment, pay down expensive store cards and personal loans first, and avoid new debt while you rebuild. If you are struggling with repayments, contact your lenders early, or speak to a registered debt counsellor under the National Credit Act, rather than letting accounts fall into arrears. Debt review can restructure repayments, though you cannot take on new credit while under it.

Be wary of anyone who promises to "clear" your credit record for a fee. Accurate negative information cannot simply be removed; only time and good behaviour repair it.

Credit and your bigger financial picture

A good credit record is especially important when you buy a home; see our guide to buying your first home in South Africa. Building an emergency fund reduces the need to borrow for surprises, which protects your score.

Frequently asked questions

How do I get a free credit report in South Africa?

You are entitled to one free report a year from each credit bureau under the National Credit Act.

What lowers my credit score?

Missed payments, using most of your credit limit and applying for lots of credit at once.

Can someone remove bad information from my credit report?

Only incorrect information can be removed through a dispute; accurate records cannot simply be cleared.

Your credit report and credit score in South Africa