The credit score is a number that totals a person's credit risk. It shows how likely they are to be able to repay their debt. A credit score influences one's financial status currently, and for the future. Lenders use credit scores to assist them when considering whether to approve a loan, and when determining interest rates they will extend to the consumer. Lenders can use credit scores to determine whether to change interest rates on someone's current credit card account.

Your credit score gives a lender an idea of your overall financial health and how much risk you might pose. As a Luno customer, you can receive your credit score online easily. Knowing your credit score is necessary to be aware of your credit worth. Despite your credit score looking above average, there may be additional influences on your credit that you aren't aware of.

Other reasons to check your credit score is that all the data in your credit reports cannot be taken as fact. Lenders can mistakenly submit the wrong information, or the information might not be relayed at all. A person with the same name may get added in with yours. Any of these factors could impact your score. Monitoring your credit report and credit score regularly is essential to maintaining financial health. If you happen to find any incorrect entries contained within your credit report, you should contact the respective credit bureau to resolve the situation.

Identity theft can happen to anyone, so keeping up with your credit score and reports would be useful to warn you of possible identity theft issues. These issues could then be rectified as soon as possible.

Lenders considering giving you a form of credit would most likely look at your credit score. This could include credit card businesses, credit unions, banks, cellular providers, bond and insurance companies. In any of these situations, your credit score would be applicable.

Monitoring your credit constantly keeps you aware of changes that might affect your credit score, such as searches into your credit data and new account creation.

A credit bureau is a company registered with the National Credit Regulator in terms of the National Credit Act, that collects, processes and reports credit information on how consumers manage their financial obligations, in terms of credit and continuous services accounts.

Our partner XDS is a registered Credit Bureau.

When you enter into a credit agreement or continuous service agreement you give consent to the service provider to provide your information to credit bureaus. Credit Bureaus also source consumer information from public records such as Court Records. Credit Bureaus collect both positive and negative information on your financial obligations.

A credit report is a composite report on all accounts that you have, with credit and continuous services providers, on how well you are meeting your financial obligations with them. The reports contain your credit score, your personal information such as your ID Number, full names, addresses, information on how well you pay your accounts, public information such as defaults, court orders, property information and enquiries that have been made on you by Credit Providers.

See the Credit Report page for further information of the content included in a Credit Report.

The NCA bestows on you the following rights:

• To apply for credit
• Protection against discrimination
• To be given reasons for credit being refused
• To access and challenge your credit information
• To receive your credit information in an official language
• To receive all credit-related documents in plain and understandable language
• To have your confidential information protected

Payment history
Always ensure timely payment of all instalments due. If you are already in arrears, it is recommended to make additional payments in order to decrease the arrears until all accounts are up-to-date. The impact of arrears on a score will be determined by the seriousness and the recency of the arrears.

Utilisation
The ratio between the current outstanding balance and the credit limit on revolving credit, such as credit cards and store cards, can impact your credit score. Lowering your utilisation by paying off some of the debt can have a positive impact on your credit score.

Length of credit history
Your credit score can improve as your credit history ages, assuming that you make regular payments on your accounts. Before opening new accounts, make sure that you will be able to cover the potential additional instalments.

Types of credit used
It can have a positive impact on a score if you are able to manage different kinds of debt successfully. Broadly speaking, debt can be classified into instalment (personal loan, bond), revolving (credit cards, store cards), and open accounts (cell phone account, security). It is not recommended to open new accounts just to improve your score, as a high number of new accounts can negatively impact your score.

Adverse records
Negative listings such as judgments and defaults can have a negative impact on your score. It is recommended to pay off any judgments and follow the recommended steps to have the judgments rescinded. Pay off all debt related to defaults. Once you have paid up a default you can instruct the credit provider to request that the default be marked as paid up.

No score allocated
No score will be awarded should you be under debt review or under administration as you may not be approved for any additional credit. If your credit history is very young you will not be awarded a score. If you do have accounts, you should receive a score in a few months time.