If you had complete control over your financial future, what would it look like? Would you launch your own business? Buy your first home? Travel to new destinations in a car you own? You may have more control than you realise, as a good credit score is one of the most powerful financial tools available to help you achieve these goals.

Here, Finance365 provides practical guidance on how to get a credit score and make it a good one as you work towards financial stability. This is important because a solid credit score can provide you with the keys to unlock new doors of opportunity.

THE THREE KEYS TO CREDIT BUILDING:

Key #1: Understand the personal power of your credit score

Many people overlook the importance of building a strong credit profile early on. Whether you’re just
Starting out or looking to improve your financial standing, understanding how to get and grow your credit score is the first step.

But what is this score?

It’s a three-digit number (assigned to your ID number) that tells credit and loan providers how likely you are to repay borrowed money. In other words, it’s a rating of trust that projects how likely you are to repay any loans or credit extended to you. The fact is, a strong credit score empowers you to qualify for loans and credit cards, secure favourable interest rates and build trust with financial institutions for future investments.

You can read more about What is a credit score article here from our Finance365 team.

Key #2: Take the steps to achieve a good credit score

Now that you know why a credit score matters, let’s look at how to get one and establish a solid financial foundation.

1. Establish your credit history

For anyone who has not had credit before, one helpful step in obtaining a credit score is to open a credit account. This can be done in several ways. One of the most common methods is applying for a basic credit card, often with a low limit designed for first-time credit account holders.

Another option is opening a retail store account, which allows customers to purchase items on credit while gradually building a repayment history. Some people may also consider taking out a small personal loan, particularly one designed for credit-building purposes.

Keep in mind that once your credit building account is in place, your financial behaviour begins to be tracked by credit bureaus. So, this is when the real work begins because this data is then used to calculate your credit score, based on several key factors [LINK to article ‘How is your credit score calculated] such as payment history (keep reading because payment history is crucial to pay attention to at this point).

2. Know the importance of your payment history

Your payment history is one of the biggest influences of your credit score! Consistently making payments on time is one of the simplest and most effective ways to build and maintain a strong score. Late or missed payments can quickly damage a credit record, making it more difficult to secure loans in the future.

Setting up automatic payments or payment reminders can help you ensure that you settle your bills on time.

Good Credit Tip: Even if you can only afford the minimum payment on your credit card, always pay it on time to keep your record positive.

3. Get good at managing your credit utilisation

Also not to be missed and on the credit keyring you’re creating, what’s called credit utilisation goes a long way in determining your credit score.

This is essentially how much of your available credit you use every month. For example, if your credit card has a limit of R10 000 and you have a current balance of R9 000 to pay back on your card, your utilisation rate is 90%. This kind of use level can negatively impact your score as our experts generally recommend keeping credit utilisation below 50% to show lenders that you are managing credit responsibly.

Key #3: Stay vigilant in managing your credit score

Don’t forget you can check your credit score for free and get your credit report any number of times a year with us at Finance365. Regularly monitoring your credit reports allows you to pick up on potential fraud incidents linked to your ID number, spot any mistakes (and in turn, get them corrected) and track improvements in your financial profile.

Now what’s left to do is to never lose these three keys because credit building is a constant part of life. Keep them on hand!

Remember too that building a strong credit score does not happen overnight. It requires consistency, responsible financial habits and a commitment to maintaining good credit behaviour. For example, keeping an eye on your credit score, you can take proactive steps to maintain or improve your rating, ensuring that if or when you need it, you have access to your best financial opportunities.

Starting today! By getting the basics right from managing your first credit account well to proactively monitoring your credit reports, you give yourself the best chance to get the keys to your dreams.

Take the next step by checking your credit score today! Don’t forget to leverage Finance365’s free alert service to stay on top of changes while you improve it. 

Whether you’re saving for a new car, planning for a dream home or gearing up for a once-in-a-lifetime vacation, Finance365’s unlimited “soft” credit checks won’t impact your score and can help you reach your goals faster.

Start your journey toward better credit right now. Take control with Finance365 and open the door to the future you’ve always wanted.