How To Build & Maintain a Solid Credit Record In South Africa

Whether you’re building a credit record from scratch or if you want to maintain or repair a credit record then this is the guide for you.

Having a decent credit record is extremely important, not to get money to spend on things you don’t need, but to have the credit available as a back up for when you really do need it.

Before I get started, I quickly want to give you a quick summary of what the South African credit bureau looks at when deciding on your final credit score.

  • Payment history – Have you been making your payments on time? And I mean bills, store accounts, and even loan repayments. This gives the credit bureau a decent idea of how well they can trust you. A late payment can stay on your credit report for up to 7 years, so this is an important indicator!
  • Your credit utilization – Once you have credit, the Credit bureau will keep a close eye on how much of that credit you use. Experian recommends not using more than 30%. The more credit you use, the more it will look like you’re being unresponsible with your credit.
  • Credit duration – Track record is an important and solid indicator of how much the credit bureau in South Africa can trust you. The longer you’ve been paying your bills on time every time, the more it will improve your credit record.

*No one knows the exact formula they use, however they have provided enough details for us to have an idea.

IMPORTANT NOTE: Want to get your credit score for free in South Africa? Read my guide here to find out how.

Now that you know what they’re looking for, here’s some methods you can use to build and maintain a solid credit record right here in South Africa.

01. Open a Savings Account and Start Saving

The BEST way you can get your credit score started in the green, especially if you have no credit record to start with, is to show banks that you don’t need it.

I know this sounds a bit backwards, however when it comes to credit facilities, the less desperate you seem, the more credit they’ll be throwing at you. Funny how things work, isn’t it?!

But it is a risk game to them after all. If you have R10,000 in savings in the bank with a regular income, and you apply for a credit card that gives you R5000, it’s almost a guarantee that you’ll get it.

I know, with a decent amount of money saved up, you probably don’t need the credit. However, remember the end game. You’re trying to build an excellent credit record over time so that further down the line when you need a substantial amount of credit, it will be a lot easier.

So open a savings account and start saving!

02. Get Store Credit From Edgars or Woolworths ETC

This is a quick little trick that will get your credit record started especially if you’re starting from scratch!

Store credit options is probably the lowest form of credit risk, so clothing stores are very likely to give you credit as long as you have a regular income.

To start, I recommend buying some clothes for around R1000 and select a 6-month payback option. Once you’ve made the purchase, pay it back as soon as possible. This will prove to South African credit bureaus that you’re responsible with your credit.

Most store accounts come as 6-month interest-free which makes it a cheap way to bulk up your credit score.

03. Get Utility bills (Water & electricity etc)

Utility bills prove to the South African credit bureau that you have a more stable lifestyle, which they LOVE by the way! If you don’t pay on time, you’ll be very easy to find.

On top of that, over time, your regular utility bill payments will also prove to credit facilities that you’re responsible with your bills (only if you actually do pay in time, of course.)

That said, think about attaching your name and details to a utility bill such as a Telkom line, electricity, or water bill. If you still live at home, you could even ask your parent if you could put your name and banking details on the Telkom bill and make the payment for them.

04. Open a Cheap Cellphone Contract

Cell-phone companies can be fussy when it comes to giving you a contract without a decent credit history, so I recommend trying this option only once you’ve followed some of my previous tips or if you have some kind of credit history.

If you’re desperate, try this. To increase your chances of getting a cellphone contract, start with the cheapest cellphone contract you can find and give as much income slips as possible. This will drastically increase your chances of success.

If you’re in luck, you’ll get accepted and it will be another form of credit that will improve your credit record over time.

05. Sign Up For Medical Aid

Getting a medical aid is another great little trick that doesn’t need you to have a credit history. Not only is medical aid important, but your monthly payments also get consolidated into your credit report, which can improve your credit record over time.

So if you haven’t done so already, consider signing up for medical aid. Discovery and Momentum are two great providers that come to mind. I personally use Momentum. It costs me R1,200 per month for a hospital plan, and I’ve really been impressed with their services so far.

06. Get Your First Credit Card With Minimal Credit

Staring out from scratch, finding a bank that will give you your first credit card will be difficult because they have no credit history to look at. That said, there are some great ‘first-time credit applicants’ options that you can try.

Capitec is a really good bank that you can use to get your first credit card. They offer a credit card to anyone that earns a minimum of R3000 per month and is over the age of 18.

This beginner’s Capitec credit card that you can view here is specifically designed for South Africans that don’t have a credit history. To apply, all you need to prove is your address and a regular income stream of R3000 per month. After the application, according to Capitec, the credit card should be issued immediately.

Once your credit record improves over time, most banks will offer you increased amounts of credit. It’s wise to accept these increases! The more credit you have access to, the more your credit score will improve over time.

07. Get a Revolving Loan

You’ll probably only be able to get a revolving loan once you have a baseline credit record. So go through some of my previous methods and bulk up your credit score as much as possible before continuing with this step.

What exactly is a revolving loan?

A revolving loan is similar to a loan, however, you only pay interest on the money you use. Since revolving loans generally offer large amounts of money, this makes it a great way to increase the amount of credit you have access to, which decreases your credit utilization.

So how does this help your credit record?

Well, consider this. Imagine Bob has access to R100,000 of credit, and he never touches. I think you would agree if we said Bob was responsible and not desperate.

This is precisely how the credit bureau will see it. The more responsible and the less desperate you look, the more your credit record will improve.

08. Keep Using Credit Facilities

One of the biggest things credit card facilities in South Africa look at is if you’re using your credit responsibly. The only way you can build this trust with them is if you actually have and use your credit.

If you just have credit available without ever using it, you can’t build trust with the credit bureau.

On top of that, credit facilities also take into consideration long you’ve been using credit when deciding on your credit score. The longer you use credit responsibly, the more they’ll trust you, which will then result in an improved credit record.

But how much credit should you be using?

As a rule of thumb, you don’t want to use more than 30% of the total credit that is available to you. So far example, if you have a credit card with R10,000, try not to use more than R3000.

09. Only Borrow What You Can Afford

Before I dive into this section, I need to explain the difference between borrowing and ‘having access to credit.’ Borrowing is the amount of credit you spend; ‘access to credit’ is how much you could potentially spend. It’s that simple.

So get as much access to credit as you possible can if you feel you’re responsible, however, ONLY SPEND WHAT YOU CAN AFFORD.


Well, your debt to income (DTI) ratio is THE BIGGEST contributor when it comes to lenders deciding how much credit they’re going to give you. The more credit you spend compared to your income, the higher your DTI ratio will be. Not only is this dangerous to your financial health, but it could also be deadly to how likely banks will loan you money

So how much should you spend?

Try to keep your debt to income ratio lower than 38%. Here’s how you calculate it.

In a nutshell, the debt-to-income ratio divides your monthly debt—which includes all your monthly expenses—by your net monthly income.

For example;

  • MONTHLY DEBT. If you pay R400 per month for your car, R1000 for your rent, and R300 per month on a previous loan payment, then your monthly debt will be R1,700.
  • MONTHLY INCOME. Let’s assume you earn R5000 per month.

The calculation will be:

Monthly debt/monthly income = 1700/5000 = 0.34 = 34%

In this example, your debt to income ratio (DTI) will be 34%. Which is considered as acceptable to lenders and you’ll have a good chance of getting a personal loan or maybe even a mortgage.

10. Pay Monthly Bills On Time

This can make or break your credit record.

One of the first factors credit facilities look at before giving you credit is your credit history. This gives them a solid understanding of how responsible you are financial. That said, once you do start taking on more credit, make sure you pay your bills on time!

If you miss any payments, this could be a death sentence to credit record, which can take up to 7 years to recover according to Experian.

So make sure you pay those bills on time to avoid backtracking. Whether it’s a cellphone contract, utility bill, or even a store account, pay it on time!

11. Pay Off Debt As Soon As Possible

If you’re trying to show credit facilities that you’re a responsible South African citizen, it’s important to actually be responsible!

As soon as you can, pay off any debt as quickly as possible. It’s best practice to try and pay off any credit card debt at least once a month. Try to have your credit balance on a big 0 before the month-end. Credit facilities will love you for it.

12. Don’t Close Down a Credit Card

Closing a credit card may impact your credit record. And I say ‘may’ because it depends on this one factor. Let me explain.

The reason why it can hurt your credit record is when you close a credit card, your ‘available credit’ decreases, which makes your ‘credit used’ a higher percentage of your total available credit. This is known as credit utilization. Experian recommends that you don’t use more than 30% of your total available credit.

Let’s see an Bob example.

  • Bob has R100,000 in credit
  • He used R20,000 of that total

So Bob is using a total of 20% of his total credit. Which is the same as a 20% credit utilization rate. Accoridng to Experian, this is good!

Now, Bob decides to close down one of his credit cards that gives him access to R50,000 of his R100,000 total amount.

Now let’s look at Bobs numbers again after he closed a credit card.

  • Bob now has R50,000 in credit.
  • He’s been good and he’s still only used R20,000 of his credit total.

Now all of a sudden Bob has used 40% of his total credit without spending more money. His credit utilization rate jumped up from 20% to 40% which is way over the recommended 30%.

According to Experian, this was a bad move Bob! This high credit utilization rate will have a negative impact on his credit record.

So to be clear. Closing a credit card in on itself can’t hurt your credit record, it’s just that when you close a credit card, it usually results in a higher percentage of credit utilization when compared to available credit.

So if your credit utilization is 0%, closing a credit card won’t have any long term negative impact on your credit record at all.

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