What Is A Credit Score?

A credit score is a numerical value financial lenders use to help them decide whether or not to approve your application for a loan or credit card. A good credit score means you’re more likely to repay your debt on time, while a bad credit score indicates you’re unlikely to repay your debt on time.

In South Africa, credit scoring is used by a number of businesses to determine who they should lend money to in order to minimise the financial risk. This includes banks, micro-lenders, all forms of retail outlets who offer store cards, and insurance companies.

What affects your credit score? 

  • Your payment history for your loans and credit cards, as well as the number of late payments.
  • How much of your credit cards and loan limits you have used.
  • The type, number and age of your credit cards and loans.
  • Your total amount of debt.
  • Any official records held against you such as bankruptcy or tax evasion.
  • How many new credit accounts or loans you have opened recently.
  • The number of inquiries made to view your Credit Report.


If you fear your credit score is not good enough, here are a few ways to improve it:

  • Reduce your existing debt as much as possible.
  • Pay all your bills on time.
  • Keep current balances on credit cards and loans as low as possible.
  • Don’t apply for new credit if it is not necessary.


If you’re struggling financially, have a good credit score, and are thinking of obtaining a Personal Loan, compare quotes online today on Hippo.co.za. With numerous creditors to look through, you could find the right deal to best suit your budget.