If you’re planning on taking out a personal loan, you’ve probably heard of the term “credit score” but what does it actually mean and how are you affected? Basically, a credit score is a number that will determine the likelihood of you paying back credit. Credit providers will look at your credit history when calculating a credit score as this alerts them to the level of risk involved in lending you a loan, a credit card, etc.

What to know about credit score

The quickest way to build a credit score from scratch is to apply for a credit card, open a clothing account, phone contract, or vehicle finance. By doing so, you’re building a credit history as many credit providers will not assist you if you don’t have a credit history. It’s important to maintain a good credit history as this will count in your favor when providers need to extend credit to you.

Having a high credit score is a good thing, it simply means that you are a low-risk borrower which makes you the ideal candidate for home loans and vehicle financing. With a bad credit score, you run the risk of being declined or higher interest rates which in turn affects the amount of money you need to pay back. Your credit is calculated using the following information contained in your credit report:

  • Account information
  • Payment history
  • Public records such as bankruptcy
  • Total debt
  • Number of inquiries for your credit report

Here’s what you can do to improve your credit score:

  • Always pay the full amount owed on all accounts every month and make payments on time as stipulated each month.
  • Work with your budget and learn to live within your means at all times.
  • Aim to keep credit repayments below 30% of your monthly income.
  • Never ignore a letter of demand for payment and the same goes for a summons to court for non-payment.
  • If you can’t make payments due to unforeseen circumstances, contact your credit provider and see if an alternative repayment agreement can be put in place.

Please bear in mind that registered South African credit bureaus will calculate your score differently based on the credit applied for.

Credit Score Range


Risk Band

767 – 999  Excellent

A consumer has a high probability of collection

Low Risk

681 – 766  Good

A consumer has an average probability of collection

Medium Risk

614 – 680  Favorable

A consumer has a low probability of collection

Potential High Risk

583 – 613  Average

A consumer has a low probability of collection

High Risk

527 – 582  Below Average

A consumer has a low probability of collection

High Risk

487 – 526 Unfavorable

A consumer has a low probability of collection

High Risk

0 – 486  Poor

A consumer has a low probability of collection

High Risk


Here’s where you can calculate your credit score for free: