What is a good credit score in South Africa when you're behind?

If you are asking what a good credit score in South Africa is while your own accounts are already falling behind, the usual advice will not fit you. Most of it assumes you are applying for finance with a clean record. That may not be you. Here is what the score measures, what debt counselling does to it, and what happens once your debts are settled.

What counts as a healthy credit score in South Africa?

A healthy score is one that sits well above the halfway mark of your credit bureau's scale, backed by a long run of on-time payments. Each bureau scores on its own scale, so the number only means something next to that scale's top end. If you have read that 600 or 700 counts as a good score, check which bureau and which scale that claim comes from.

Underneath the number, a score chiefly tracks two things: whether you pay your accounts, and how much of your available credit you use. The bureau or app behind your score can tell you where you sit on its scale.

What hurts your credit score the most?

Missed and late payments do more damage than anything else. Every month an account stays unpaid drags the score down further, and once it is handed over or written off, the mark can stay on your record for years. The next biggest factor is running your cards and store accounts close to their limits.

This matters if you are already struggling, because the damage happens whether or not you ask for help. Where payments are slipping, comparing registered debt counsellors costs nothing and shows you your real options.

Can you buy a house with a 600 credit score?

In some cases, yes, but expect a shorter list of willing lenders, a higher interest rate and usually a larger deposit. A home loan decision doesn't usually rest on the score alone. The lender also weighs your income, your living costs, your other debts and how stable your job is.

The score doesn't set the size of the loan on its own, either. Your income and expenses set that ceiling, while the score mainly decides whether the lender says yes and on what terms. A modest score with an honest budget can beat a good one stretched thin.

Can you get a car with a 580 credit score?

Possibly, though a score in that range usually points you towards lenders who specialise in higher-risk clients, and they charge for it through higher interest, large deposits or balloon payments.

Be careful with anyone advertising easy finance for people with bad credit. If you are already behind on the accounts you have, borrowing more is likely to deepen the problem, so run through this self-check before you borrow.

How do you build a 700 credit score in South Africa?

You build it the slow way: every account paid in full and on time, month after month, with balances kept well below their limits. Nothing moves a score like a long, uneventful record of payments. There is no shortcut.

The trap, if you are over-indebted, is advice to open a small account or two to build a score. New credit means repayments you cannot safely afford, and every application leaves a mark on your record. When money is already tight, the score is not the problem. The debt is. Fix the debt and the score follows.

What debt counselling does to your credit score

Debt counselling usually lowers your score for a while, because a flag goes on your credit record and new credit is off the table until the process ends. Accounts included in the process also show as being paid under a rearranged plan rather than as originally agreed. So far, so bad.

But if you are already missing payments, your score is dropping anyway, and the defaults and legal trouble that follow do far worse damage. Debt counselling stops that slide by resizing repayments to what you can afford, and in most cases credit providers cannot take further legal action on accounts under review while you keep paying the new amounts.

Once your debts are settled, your counsellor issues a clearance certificate, and the credit bureaus are instructed to remove the debt review flag. That flag is not meant to follow you around afterwards, though the payment history on your individual accounts can remain, and it fades as clean behaviour builds. Because the outcome depends on who handles your case, it helps to know what separates a good counsellor from a bad one.

Can anyone sell you a better score?

No, and anyone who promises that is not being straight with you. No registered debt counsellor may guarantee a score, and no lawful service deletes accurate information from your record for a fee. If a listing is genuinely wrong, you can dispute it with the bureau yourself. That costs you nothing.

What a good counsellor can do is help you clear the debt that is dragging your score down, which is the only fix that lasts. Our guide to the best debt review companies covers what to look for, or you can browse our directory of counsellors and put the same questions to a few of them. A good one to start with: what will you do for me that I cannot do myself?

Photo by Vitaly Gariev on Unsplash