A credit score is a number that helps lenders estimate how risky it might be to lend money to you. It is essentially a snapshot of your creditworthiness—how likely you are to repay credit on time, based on your past credit behaviour and the information recorded on your credit profile.
Even though a credit score is only an estimate (and not a complete picture of who you are or how responsible you may be), it still matters because many credit providers rely on it when making decisions. In practice, your score can influence whether you get approved for credit, what interest rate you’re offered, and what terms you qualify for.
If your score is poor, lenders may assume that one or more of the following could be true:
You may already be overwhelmed by existing debt, meaning you might struggle to take on more repayment obligations.
You may not consistently prioritise repayments, which increases the risk of missed instalments and late payments.
You may be seen as higher-risk, which can make lenders cautious because they’re lending you money they expect to be repaid with interest.
You might feel that this is not a fair reflection of your real-life financial situation—especially if your poor score was caused by a once-off event like job loss, illness, a divorce, or rising living costs. That feeling is understandable. But the reality is that credit providers often treat credit scores as a key signal. So, whether you agree with it or not, it is important to understand the downsides of a poor credit score and how it can affect your everyday life.
What are the risks of a poor credit score?
A poor credit score can create several disadvantages, ranging from higher costs to fewer options. Below are the most common risks consumers face when their credit score is low.
1) Higher interest rates (credit becomes more expensive)
When lenders view you as a riskier prospect, they may charge you a higher interest rate to compensate for that risk. This is one of the most direct financial consequences of poor credit.
Higher interest means:
your monthly instalment may be higher, and/or
you will pay more over the full term of the loan.
Even a small difference in interest rate can add up to thousands of rand over time, especially on long-term debt like vehicle finance or large personal loans.
2) Loan and credit denials (applications get rejected)
If a lender considers your credit score too low, you may be declined for:
personal loans,
store accounts,
credit cards,
vehicle finance,
home loans, or
credit-limit increases.
This can be frustrating, but it can also create practical problems. For example, it may make it harder to manage genuine emergencies (like a medical expense or a car repair) or to take advantage of opportunities (like financing tools for a small business or relocating for work).
A less obvious issue is that repeated credit applications in a short period can sometimes create additional credit enquiries, which may further weaken your profile. That’s why it’s better to understand your credit position before applying repeatedly.
3) Difficulty renting a home
Many landlords and letting agencies do credit checks before approving a tenant. They often want reassurance that rent will be paid on time and that the tenant can afford the monthly commitment.
If your score is poor, you may face:
rejected rental applications,
higher scrutiny of your income and expenses,
or requirements for additional proof (like extra payslips or bank statements).
In some cases, landlords may ask for a larger deposit or require a guarantor. Even if you can afford the rent, a weak credit record can make the process harder and slower.
4) Higher insurance premiums (in some cases)
Some insurers use credit-related information as part of how they assess risk, which can affect your premium. Where this approach is used, a lower score may contribute to higher costs for certain insurance products.
This can feel unfair because insurance risk and credit behaviour don’t always match perfectly. But the practical impact is that your monthly expenses may rise, which can make budgeting more difficult.
5) Higher security deposits for services
Service providers—like utilities, cellphone contract providers, or subscription-based services—may require a higher deposit from customers with poor credit.
From the provider’s perspective, the deposit reduces their risk. From the consumer’s perspective, it creates an extra upfront cost at the exact time you may already be financially stretched.
6) Employment challenges in certain industries
Some employers, especially in positions involving money management, trust accounts, sensitive data, or government-related roles, may request credit checks as part of the hiring process.
A poor credit score may:
raise concerns about financial vulnerability,
delay hiring decisions,
or reduce your chances of certain promotions or roles (depending on the industry and job requirements).
This doesn’t mean every employer will run a credit check, and it doesn’t automatically mean you will be denied employment. But it can be a barrier in some sectors.
7) Limited access to helpful financial products
A poor credit score doesn’t only affect whether you can borrow—it also affects what kinds of financial products you can access.
Consumers with low scores may struggle to qualify for:
low-interest loans,
credit cards with rewards or better benefits,
higher credit limits,
or repayment terms that reduce monthly pressure.
This can make everyday money management harder because good credit often unlocks more flexibility and lower costs.
8) Stress and emotional strain
Financial pressure isn’t just practical—it’s emotional. When poor credit limits your options and increases your costs, it can cause:
anxiety,
frustration,
shame or embarrassment,
relationship stress,
and a constant feeling of insecurity.
Many people experience financial stress not because they are irresponsible, but because they feel stuck in a system that gives them fewer opportunities to recover. A poor credit score can be one of the factors that contributes to that feeling.
What can you do about a poor credit score?
The most important first step is knowing your credit status. Many people only discover their credit score is poor when they are declined for credit. But if you plan to apply for finance in the future—whether for a car, home, or even a rental—it helps to check your credit report early.
Step 1: Get your credit report and understand it
There are many tools that let you retrieve a credit report. But the score alone is not enough. You need to understand what’s driving the score.
When you review your report, you want to check:
whether accounts are listed correctly,
whether any settled accounts still show unpaid,
whether there are errors or duplicate listings,
whether you have missed payments recorded,
and how many recent credit enquiries are showing.
Correcting errors can sometimes improve your score faster than you expect, because inaccurate negative information can unfairly pull your profile down.
Step 2: Use a clear improvement plan
Once you know what’s affecting your score, you can take steps to improve it. A strong improvement plan usually includes:
paying accounts on time consistently,
catching up on arrears where possible,
reducing reliance on revolving credit (like maxed-out store accounts),
avoiding repeated credit applications,
and settling problem accounts strategically.
Credit score improvement is often about building a pattern. Lenders want to see stability over time—not just one good month.
How Debt Sage can help
At Debt Sage, we don’t just provide your credit report—we help you understand what it means and what actions will make the biggest difference. You can use our free credit report tool to get an in-depth view of your credit profile, how much debt is recorded, and what your creditworthiness looks like.
Once you know your credit score, you can then read the action plan to improve your credit score—step by step, based on your real situation and goals.