Free Credit Report And Coaching

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Personal finance website, JustMoney, has launched a new offering, CreditSav, that provides you with a free, up-to-the-minute credit score and report. In addition, you can access an online coach who is dedicated to answering your credit score, loan, and investment questions.  

Many people don’t understand what a credit score is, or its significance, but it can play a very big role in your financial future. Lenders use your credit score to decide whether you are a low or high-risk borrower. An institution, such as a bank, checks the score and accompanying report in detail before you are given any kind of loan or credit. In turn, it contributes to the interest rate you will be charged.

If your report indicates that you are high risk, because you’ve been unable to manage your debt and make regular payments, your chances of being granted another loan or a bond are very slim. Even if you are eligible, you will pay higher interest rates than higher scoring consumers.

To register and obtain your free credit score, click here.

Free credit score – how it works

Your CreditSav credit score is numbered from 1 to 1000, which ranges from insufficient information, to excellent.

  • 901 – 1000: Excellent
  • 851 – 900: Good
  • 801 – 850: Okay
  • 601 – 800: Needs work
  • 3 – 600: Not good
  • 1 – 2: Not enough information to score

The score takes into account your outstanding debt, both long-term and short-term, and the number of credit accounts you have open. It will also indicate whether there are any judgements against you, and any debt counselling you may be receiving. In addition, it will show your debt-to-income ratio, and how you measure up compared with other South Africans.

Says Sarah Nicholson, JustMoney Operations Manager: “Given our tough economic climate, and the effect of the lockdown on our finances, few of us can pay for a car or apartment in cash. Debt is unavoidable, so being able to obtain a loan or bond makes all the difference to your lifestyle. In addition, if you can get a loan at a lower interest rate, you can save thousands of rands over the payback period.

“At the end of the day, the better your credit score, the better the deals you’ll be eligible for when you really need them.”

Improving your credit score

The good news, says Nicholson, is that there are ways to improve your credit score. These include:

  1. Paying your accounts on time, to avoid being labelled a slow payer.
  2. Paying credit card balances in full every month.
  3. Opening credit accounts only as needed.
  4. Paying off debt as quickly and efficiently as you can.

“Keep in mind that avoiding any credit will count against you, as there will be no record of how you pay back a loan,” says Nicholson. “The key is to take out a loan, but to manage your finances well so that you keep up with the repayments regularly and build up a good record. This will stand you in good stead when you want to purchase a larger asset like a vehicle or house.”

Debt stress

If your credit score is poor, or more than a third of your income is going towards your debt, it’s best to take rapid action.

The best solution will depend largely on how indebted you are, and whether you’ve missed any payments. Debt consolidation is one possible solution that doesn’t affect your credit score. It focuses largely on rehabilitating your debt and allowing you to repay it in a manageable and financially safe way. Read a helpful guide on debt consolidation here.

“At JustMoney, we understand that managing your finances is often stressful enough, which is why we’ve aimed to make getting your credit score straightforward,” concludes Nicholson. “You can get the information you need quickly from your desktop or mobile phone and, with the help of a coach if necessary, make informed decisions.

“If you’re indebted and stressed and need help, the coach can direct you to possible solutions; and if your credit score is good, and you’re interested in a ‘good’ loan to fund your studies or to pay for a medical emergency, for an example, you’ll be put in touch with trusted financial brands.”