What is a credit score?

A credit score is a number that quantifies an individual’s credit worthiness. Prospective money-lenders and creditors use this number to determine one’s ability to repay debt. Credit scores range from 300 – 850 (300 being very poor and 850 being excellent). In essence, if you have a high credit score, lenders see you as someone who will be able to meet repayment installments.

The importance of knowing your credit report.

Knowing your credit score is important, especially if you intend to make a significant purchase like a house, a car or take out a business loan. Individuals with poor credit scores may not qualify as easily as those with higher credit scores. Money lenders may reject an application, or offer a loan at a higher interest rate. Conversely, individuals with a higher score are more likely to qualify for preferable interest rates.

Who calculates your credit score?

Credit bureaus such as Experian, TransUnion, Compuscan and XDS calculate consumer credit scores. Each of these bureaus are sent information by lenders about consumer’s lending habits and how they are managed. The bureaus also share information such as court judgments against individuals or lists of individuals who are currently under debt review. These are pieces of information thatform part of a personal credit report.

How to get your credit report?

According to Old Mutual, South African citizens are entitled by law to one free credit report per year from any one of the bureaus. We here at Cash Converters also offer free credit reports to our customers. All you have to do is visit your nearest Cash Converters store and chat to one of our consultants.