Make your credit work for you

A good credit status can help with more than borrowing. A good credit score impacts everything from renting a flat to getting a mobile phone. Lenders, landlords and utility providers will review your credit report when deciding whether to grant you credit and what to charge. Sound credit practices are crucial for establishing and enhancing your credit history and credit rating. Credit providers consider an individual's financial behaviour to be critical in determining a credit application's outcome.



Pay your bills on time

It is essential to make at least the minimum payment on time on all your accounts every month. Pay your bills on time and, whenever possible, pay more than what is due. This will help you pay down debt more quickly, save on interest, and improve your credit rating. Your payment history accounts for a significant part of your credit score, so paying your bills on time is essential to improving your credit score.

Contact your bank immediately if you have trouble meeting the minimum required instalment.



Control your credit card spending

Control your credit card transactions and closely monitor your credit account balance. Your credit score could be negatively impacted if you use all the credit made available. Avoid maxing out your credit accounts.

Manage your debt-to-income ratio

Consider your debt-to-income ratio (DTI). To calculate this, divide your monthly debt payments by your monthly income. Lenders use your DTI ratio to evaluate your ability to manage your monthly payments to repay the money you want to borrow. You can obtain additional credit if your obligations are significantly less than your income. Establishing a budget to keep track of and plan your spending is essential.



Contribute to an emergency fund

Setting aside money each month toward an emergency fund is a smart idea in addition to regularly contributing to a savings account. If you find yourself in an unexpected financial situation, you can meet your credit obligations and unforeseen expenses by using money from your emergency fund.

Set up recurring transfers into a savings account to help you save for your emergency fund.



Monitor your credit reports

It is essential to monitor your credit score regularly and to review your credit reports with credit bureau agencies such as TransUnion to ensure that they are accurate. You can spot any errors or fraud and correct them before they negatively impact your credit history or credit score.