Building credit - What you need to know
Having a good credit record makes it more likely that a company will lend you money. It will also help you to get credit again in future (as long as you can afford it).
If you want to build and maintain a good credit record, it’s important to use credit in the right way. You can do this by doing the following:
- Only borrowing what you can afford
- Making all your payments on time
- Paying off your accounts quickly
- Keeping your balances low
Some credit bureaus, like TransUnion or Experian, allow you one free credit report per year. So instead of waiting until you’ve applied for credit to find out that you have a bad credit record, you can apply for a free credit check via their websites.
There is no quick fix for bad credit scores. If you want to rebuild your credit score, you need to ensure that all your payments are up to date or paid off, you shouldn’t make any new credit enquiries, and you need to wait.
It’s important to note the following:
- Sequestration and administration orders remain on your credit report for five years
- Adverse classifications such as continually paying late can remain on your report for one year
- Credit enquiries remain on your report for one year
If you notice anything on your credit report that you believe should be removed, you can lodge a dispute with the credit bureau, who will investigate and respond within 20 days.