How is my credit score calculated?

Understanding what factors impact your credit score can be confusing, especially when you consider that the different credit bureaus use different scoring models. However, there are several factors that are consistent, regardless of the scoring model. To get the best credit score possible, you should try to improve and maintain the factors that have the highest impact on your score.

What has the highest impact to my credit score?

Your payment history:
Your payment history is a major factor that will affect your credit score. One of the best ways to create and maintain a good credit history is to ensure that you make your credit repayments on time. If you make your payments on time you are showing creditors and future lenders that you’re a safer bet to loan to.

If you are late on a payment or you miss a payment altogether, this can hurt your credit score.

Your credit utilization:
Your credit utilization looks at how much of your available credit you’re using. It’s calculated by dividing your total credit balance by your total credit limits.

An optimal credit utilization is below 30 percent. This means that if you have a R10 000 credit card limit, you should try to keep your balance below R3000. If you keep your credit utilization low, creditors are far more likely to see you as a responsible credit user. Another benefit is that you will have credit available in the case of an unforeseen expense.

Derogatory marks:
A derogatory mark is a negative point on a credit score which generally indicates that a credit repayment has been paid as agreed to. An example of this would be missing a payment or bankruptcy. A derogatory mark can stay on your credit report for up to 10 years. This will in-turn, hurt your score. The amount of time that a derogatory mark stays on your credit report depends on what type of mark it is. There are certain steps that you can take if there is a derogatory mark on your credit report. Firstly, if the derogatory mark is an error, you can dispute it. This can be done by sending an email to or call 0861 51 41 31 to chat to a friendly consultant. If the derogatory mark is correct you can still improve your credit situation. You can do this by making payments on the accounts that are overdue. You also need to ensure that you consistently make your minimum credit payments on time. Fortunately, if you start taking the right steps to building a solid credit history, your credit score should start to rebound after 2 years.

What has a medium impact to my credit score?

The maturity of your credit accounts:
This factor looks at how long you’ve had and managed credit accounts. Although this factor is not typically one of the most important factors, it does give creditors piece of mind when they see that you’ve managed credit responsibly over a longer period. Closing credit accounts could also negatively affect your credit score, as the age of your credit accounts is calculated by looking at the average of all your accounts.

What has the lowest impact to my credit score?

Hard inquiries:
A hard inquiry usually happens when you apply for a new form of credit and the credit providers do a look-up on your credit score. If you apply for multiple forms of credit, there will be a lot of hard inquiries, as it indicates that you are in serious need of credit. Luckily, this impact on your credit score will be short-lived if you make all your credit payments on time.

All your credit accounts:
This factor looks at all the different types of credit that you have. It is good to have a mix of credit, as it shows creditors that you’ve responsibly loaned money from a range of credit providers. With this being said, you should only apply for new forms of credit if you are financially able to do so.