Financial Education

Significant improvements can be seen in 3-6 months with consistent effort: paying bills on time, disputing errors, and keeping credit utilization below 30%. A 50-100 point increase is achievable in 90 days if you address negative records and make timely payments. Major credit repair (from 300 to 650+) typically takes 12-24 months.

Interest rate is the cost of borrowing the principal amount. APR (Annual Percentage Rate) includes the interest rate PLUS all fees (initiation fees, monthly service fees, insurance). Example: A loan with 20% interest + R1,200 fees might have a 32% APR. Always compare APRs, not just interest rates, to understand the true cost.

It depends on your situation. Consolidation is beneficial if: (1) the new loan's APR is lower than your current average APR, (2) you're struggling with multiple payment dates, (3) you can afford the new monthly payment. It's NOT worth it if the consolidation loan extends your repayment period significantly, increasing total interest paid. Calculate total repayment amounts before deciding.

Partially, yes. While under debt review, you can't take new credit, but you CAN: (1) Make consistent payments through your debt counselor, (2) Dispute credit bureau errors, (3) Check your credit report quarterly. Your score will improve after successfully completing debt review and receiving a clearance certificate. Full recovery typically takes 6-12 months post-clearance.

Credit scores in SA range from 300-850. A score of 670+ is considered good, 740+ is excellent. Most NCR-registered lenders require a minimum of 500-550 for approval. Banks typically want 650+ for prime rates. Check your score free annually at TransUnion, Experian, XDS, or Compuscan—your score may differ between bureaus.

You're entitled to one free credit report per year from each bureau: TransUnion (transunion.co.za), Experian (experian.co.za), XDS (xds.co.za), and Compuscan (compuscan.co.za). ClearScore and Kudough also offer free ongoing score monitoring. Checking your own score is a 'soft inquiry' and doesn't affect your credit.

Five factors determine your SA credit score: (1) Payment history (35%) - paying on time is crucial, (2) Credit utilization (30%) - keep card balances below 30% of limits, (3) Credit history length (15%) - older accounts help, (4) Credit mix (10%) - having different credit types, (5) New credit inquiries (10%) - too many applications hurt your score.

Yes, but options are limited. 'Thin file' borrowers can start with: (1) Secured credit cards (Capitec, African Bank) requiring a deposit, (2) Store accounts (Woolworths, Edgars) which are easier to approve, (3) Microfinance lenders specializing in first-time borrowers (smaller amounts, R500-R3,000). Building credit takes 6-12 months of consistent payments.

Financial experts recommend the 28/36 rule: no more than 28% of gross income on housing, and no more than 36% total on all debt payments. For SA consumers, keep total debt payments below 40% of net income. If you exceed this, consider debt review or focus on paying down high-interest debts first (debt avalanche method).

Two proven methods: (1) Debt Avalanche - pay minimums on all debts, put extra money toward highest APR debt first. Saves most money. (2) Debt Snowball - pay off smallest balance first for psychological wins, then roll that payment to the next debt. Choose based on your personality. Both work better than minimum payments only.