1. When do I need Debt Advice?
2. What does the advice entail?
3. What is bad Debt Management Advice?
4. What is good Debt Management Advice?
5. When is it too late?
6. Who do you speak to?
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A credit score is attributed to a consumer by various credit bureaus in South African. At present there are three leading bureaus that seem to wield the most authority on credit score matters. Most debt management advice encourages consumers to obtain their credit scores regularly, in order to asses their debt situation and identify irregularities.
A credit score is compiled by analysing credit gaps, late payments, prompt payments and the amount of time a consumer takes to close an account. Below are a few pieces of debt management advice that help a consumer improve this score.
- Always maintain your credit cards above 30%. This means that unless you have an emergency, only spend 30% of the available credit on the card. This shows that a consumer is responsible with credit.
- Don’t have too many credit inquiries done, as it reflects negatively on your credit and makes up 10% of your score.
- Pay on time. Often consumers can’t find the time to pay on time, and would rather run into the store on the weekend to pay their account. However, any payment made even a day after the due date on the bill will reduce a credit score.
- Consider the type of debt you have carefully as various debts attribute various points to the score. The most negative type of credit is revolving credit, as it is not a reliable indicator of a consumer’s ability to pay regularly.
- Settle all your debts as soon as possible. By showing creditors that you are willing to pay above and beyond the minimum, it will reflect positively on your score.
If your credit scores reflect inconsistencies, contact the NCR or Credit Ombudsman immediately to have them investigate the matter and set the record straight.
Article written by: Andrea van Tonder 03-2013