Having a good credit status determines your trust rating so having a good credit score is key. This will not only determine how much credit you qualify for but how high or low your interest rate will be.

A good credit score also puts you in a better position qualify for vehicle or housing financing should you be ready for a long term commitment. “It is basically a report card of how well you manage credit given to you by various financial institutions and retailers,” says Product Head at FNB Money Management, Ester Ochse. Noting that products like credit cards, personal loans, home loans, and retail store cards are some examples of the forms of credit one can receive from financial institutions. Debtors pull up your credit history to check how you manage your debt. “This score indicates to financial institutions the level of risk they will take if they extend you credit. The better your credit score, the more chance you have of receiving credit and potentially at a better interest rate. The lower your credit score, the less likely you are to get credit, and if you do, the rate will be higher,” she says.

Below she lists some factors that have a negative impact on your credit score.

Being late on monthly payments
Missing monthly payments
Frequently applying for credit
Having credit usage continuously going up
Having a judgement against you
Being declared bankrupt

Ester affirms that there are measures you can take to improve your credit score, and offers the following tips:

Align your debit order dates as closely as possible to your salary date
Have an emergency fund in place for unforeseen events and expenses - this way you don’t need to rely on credit. Set up and stick to a budget.
Check your score regularly - to ensure you are on track and spending money on things that are important. Use the Smart Budget Tool on the FNB App to keep track of your budget.
Checking your credit status is easy, go to nav>>Money, credit status on the FNB App. Go through the tips on how to improve your credit status, this could mean you pay less for credit, and free up some money to save and invest for the future.