Your credit profile is like your ‘financial resume’. It’s not only a record of your past financial decision makings, but it plays a critical factor when you apply for credit like loans or credit cards.
When you apply for the opportunity to borrow money, your credit history on your profile will take center stage. Companies do a credit history check to predict your future financial behaviour. This credit check can include viewing your payment history, the amounts you owe, your account activity and how long you’ve been servicing your accounts. It can also show any judgments against you, defaults and enquiries made about your credit worthiness. Your credit score (the number that is portrayed by your credit profile) can open doors to financial opportunities or approvals and is calculated based on the string of information evident in your credit report.
Due to your credit profile playing such a vital role in determining if you qualify for credit or not, it is important to build up a good credit record for yourself. Here are some handy tips to help you build a strong credit profile:
- Pay Your Instalments on Time
Timely payments are crucial as your payment record has a big impact on your credit score. Set up reminders and automatic payments/debit orders to avoid late fees or missing any payments.
- Manage Card Balances
Keep your credit card balance(s) very low as high balances (for example, 30+% of your credit limit) can hurt your credit score.
- Avoid Opening Too Many Accounts
Opening too many new credit accounts in a short period of time can be seen as risky behaviour. Be selective and mindful of the type of credit you require. And try not to increase your available credit as this can put a dent in your credit score.
- Speak/Be Open with Your Creditors
If you have an issue, inform your creditors: Struggling to make payment won’t help your credit score, for example, but if you can work out a payment plan with your creditors, your score should gradually improve.
- Maintain Financial Wellness
Good financial habits, like budgeting and saving, contribute to a strong credit profile.
- Inspect Your Credit Report
Regularly review your credit report for any errors or discrepancies and make sure any inaccuracies are reported promptly. Do note – your credit record inquiries will reflect on your report for two (2) years.
- Address Any Past Issues Reflected on Your Profile
Deal with negative items on your credit report, like late payments or collections. If you are losing the battle with your debt repayments, why not consider a legal, structured process like Debt Counselling? This process is NOT a quick fix, but you are legally protected (meaning your assets like your car and house) and you are given the opportunity to pay off your creditors over a longer period. When under Debt Counselling you are tackling your debt sustainably and proving to your creditors that you are committed to settling your outstanding debt amounts. Learn more about the National Credit Regulator’s recommended process here à CTA to CreditSmart
Building a strong credit profile takes time, but the above tips can set you on the right path. Use the ThreeSixty.me platform to regularly monitor your progress (once every few months) and ensure your report is accurate so that you can alert the credit bureaus/creditors if you spot any discrepancies.
Empower Your Financial Future with ThreeSixty.me.
