{"id":307328,"date":"2019-03-30T08:00:23","date_gmt":"2019-03-30T06:00:23","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=307328"},"modified":"2019-03-29T17:12:51","modified_gmt":"2019-03-29T15:12:51","slug":"how-to-calculate-your-credit-score-and-8-ways-to-improve-it","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/307328\/how-to-calculate-your-credit-score-and-8-ways-to-improve-it\/","title":{"rendered":"How to calculate your credit score – and 8 ways to improve it"},"content":{"rendered":"

National Credit Regulator data shows that 54% of South Africans have their applications for credit such as car finance, home loans and personal loans rejected. If you\u2019ve been given the cold shoulder by your bank or lender, it could be that your credit score is to blame, says ClearScore.<\/p>\n

Being rejected by a bank or lender can happen to anyone. A bank might reject an application for various reasons, including having a bad or little credit history, the financial technology business that gives customers free access to their credit score and report, said.<\/p>\n

Lenders look at your credit score and credit report to assess your credit application. Most people don\u2019t know that their credit score \u2013 essentially a numerical rating of their creditworthiness \u2013 could be one of the key culprits, said Justin Basini, founder and CEO of ClearScore.<\/p>\n

This is why knowing your credit score and the contents of your credit report can help you avoid being rejected for a loan. With access to this information, you can see what the bank or lender sees, so that you can take steps to improve your score and boost your chances of being accepted for a loan, he said.<\/p>\n

Your credit report is like your financial resum\u00e9<\/strong><\/p>\n

Start by thinking of your credit report as your financial resume. Just as potential employers will look at your work resume to decide whether to hire you, a lender will look at how you\u2019ve handled credit in the past to decide whether to lend to you, ClearScore said.<\/p>\n

If your credit report shows that you\u2019ve handled credit well, always paying back what you\u2019ve borrowed, this shows the lender that you\u2019re less risky. The higher your credit score, the less risky you are to the lender, and the more likely you are to be accepted, it said.<\/p>\n

Your credit report contains your financial history, including how and when you repay your debts, how much you owe, and how long you\u2019ve been using credit. Your credit score is a three-digit number calculated using your credit report \u2013 it\u2019s like a grade of your credit report.<\/p>\n

You can access your score and report 24\/7 for free, forever by registering online<\/a>.<\/p>\n

Being able to keep tabs on any positive and negative fluctuations in your credit score at more regular intervals allows you to intervene and to track whether there has been an improvement in your score after you have taken action, ClearScore said.<\/p>\n

Simple steps to improve your score<\/strong><\/p>\n

A low credit score may make it more difficult to get credit. If your score is low, there are many ways that you can start to improve it.<\/p>\n

\u201cThe good news is that everyone can take some simple steps to improve their credit score. Your credit score is not determined by your income, so while not everyone can have an \u2018excellent\u2019 credit score, there are steps we can all take to improve ours,\u201d Basini said.<\/p>\n

Tips to boost your credit score<\/strong><\/p>\n