Debt Counselling in Vereeniging

Debt Sage is working with consumers in Vereeniging. We are providing free financial health checks for consumers in Vereeniging. This whereby we pull your credit report to check the number of accounts open and how you have been handling your accounts and give advice on taking remedial action. This is very important as it influences your credit score when applying for credit.

A credit score is a statistical number that is used to measure a consumer’s credit worthiness. Lenders use credit scores to assess the risk assigned to a borrower’s ability to repay his or her debts. Generally, the higher your credit score, the better. A TransUnion Consumer Credit Score, for example, can range from 0 to 999 which is poor to excellent.

Payment history and credit utilization ratio are the most critical in credit score factors among other factors such as length of credit history, types of credit. When calculating credit scores, payment history and credit score utilization can carry weight of as much as 65%.

Defaulting on a payment will negatively impact your credit score.

What are the risks of a poor credit score?

A poor credit score implies a high credit risk rating. It indicates that a consumer cannot handle new credit as they might be overwhelmed by current debt that they have. In this respect, a poor credit score would mean that lenders are highly unlikely to extend new credit to you.

A consumer with a high credit risk rating implies that lenders are likely to charge that consumer a higher interest rate for new credit.

How can one improve a credit score?

One improves his /her credit score by identifying which elements from his/her credit history are having the greatest impact so that you can take appropriate action.

Payment history – From your credit report you will be able to identify which accounts you have not been paying as you should. You should then ensure you pay the full instalment owing on each of your accounts. Paying your bills on time, every month is one of the most important contributors to a good credit score. Reversing debit orders and paying accounts after payment date impacts negatively your credit score.

Huge debt – If you owe too much debt it is important to keep your credit utilisation ratio on your account to less than 35%. This can be achieved by paying down debt strategically. For example, through targeting accounts with smaller balances first among other strategies.

Contact Debt Sage, the expert debt counsellors in South Africa today. We will help you with a financial health check.