What is a credit record and why do you need one?

We all know that having a good credit record is important, but do we actually know why?

Financial journalist, Maya Fischer French says that credit is something that people do not consider properly until it is too late.

As to what it means, French says that a credit record shows banks etc that you are a good payer with a good attitude towards debt and indicates how much credit you have.

Read: Reckless lending is still common practice in SA

Having a balance between having some sort of credit which shows that you have repaid and not having too much credit gives you a credit score. Your credit score is extremely important over time.

Maya Fischer French, Financial Journalist

Having a good credit record helps in various areas like when opening up a cell phone contract or when getting insurance.

While potential employers are not allowed to look at your credit, French says there are personal agencies who do request to look at your record.

There are a lot of areas your credit record can effect than your cell phone record when you apply for one.

Maya Fischer French, Financial Journalist

To begin creating a good credit record, French says the easiest way is too open an account at a retail outlet, but warns that this must be done carefully and responsibly.

It is easy for you to overuse that account and French says she has found so many young people sitting in huge debt because of store cards. One way to ensure this does not happen is to open one and then close it shortly after.

Another way is to get a credit card. French says that there are many good reasons to get a credit card other than creating a credit record. French says that it is best not to use the the credit line, but because it is a great payment system.

What you do, is you take a credit card, but you set a very low credit limit so that you are almost virtually pre-funding that card on a regular basis.

Maya Fischer French, Financial Journalist

In addition to having self-discipline with your spending habits, French says it is extremely important to check your credit record and not only when you need to.

French says that credit bureau can give you your credit record for free once a year. Checking it will not only make you conscious of your financial status, it will also flag things like identity theft.

Overall, French says that having good credit boils down to one thing - good credit behavior.

Listen to the full interview below:


This article first appeared on 702 : What is a credit record and why do you need one?


Recommended

by NEWSROOM AI

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
To cloud or not to cloud?

To cloud or not to cloud?

CEO at Afrovation, Maxwell Ramutla answers the question most new companies struggle with, to use the cloud or not.

Worried about Govt using pensions to save SOEs? You may want to check this out

Worried about Govt using pensions to save SOEs? You may want to check this out

The Money Show’s Bruce Whitfield interviewed Pan-African Investments and Research Services CEO Dr Iraj Abedian.

How to avoid a horror story when buying software for your business

How to avoid a horror story when buying software for your business

The Money Show’s Bruce Whitfield interviews Aurik Business Accelerator founder Pavlo Phitidis.

How to survive retrenchment

How to survive retrenchment

Your rights (and their responsibilities) upon retrenchment. Bruce Whitfield interviews Personal Financial Advisor Warren Ingram.

How Sage Small Business Awards with CapeTalk helped credibility of start-up Yoco

How Sage Small Business Awards with CapeTalk helped credibility of start-up Yoco

2016 Sage Small Business Award with CapeTalk winner Yoco's Katlego Maphai chats about company's growth. Entries are open for 2017.

Popular articles
Signs your jealousy may be getting unhealthy

Signs your jealousy may be getting unhealthy

Managing jealousy has become increasingly important, particularly with the evolving structure of modern relationships says Dr Eve.

Survivor winner Tom Swartz vows to buy his wife 'new boobies and a family house'

Survivor winner Tom Swartz vows to buy his wife 'new boobies and a family house'

Swartz says he would have done anything to get the R1 million prize money.

'There is no way Magnus Malan could've done the things he is accused of'

'There is no way Magnus Malan could've done the things he is accused of'

Former police minister Adriaan Vlok has rejected accusations that former minister Malan was at the centre of a paedophile ring.

'There is no verse in the Quran that says women should cover their faces'

'There is no verse in the Quran that says women should cover their faces'

Dr Taj Hargey says he is advocating for the ban of women wearing burkas in public because they look ridiculous.