Building a Credit Record the Right Way

A good credit record can open doors to better opportunities such as housing, education funding and business finance. In South Africa, the National Credit Regulator, known as the NCR, encourages consumers to use credit responsibly so they can improve their financial future without falling into debt.

Your credit record shows how you borrow money and how well you repay it. According to the NCR, lenders use this record to decide whether to give you credit and on what terms. Paying your accounts on time every month is one of the most important ways to build a positive record. Late or missed payments can damage your profile and make future borrowing more difficult and expensive.

If you are starting out, the NCR advises consumers to begin small. This could be a low value store card or a small loan from a registered credit provider. Only take credit that you can afford to repay comfortably. Before signing any agreement, you have the right to receive a full breakdown of costs, including interest and fees. This helps you understand the true cost of borrowing.

Using credit wisely also means limiting how many accounts you open. The NCR warns that borrowing from too many places at the same time can harm your credit record. Multiple loans increase the risk of missed payments and can make lenders see you as financially stretched. It is better to manage one or two accounts well than several poorly.

Paying on time should be a priority. Setting reminders, paying as soon as you receive your income and keeping track of due dates can help. If you experience financial trouble, the NCR encourages consumers to contact their credit provider immediately. Early communication can lead to payment arrangements or assistance before the situation worsens.

South African consumers also have the right to check their credit record. The NCR confirms that every consumer is entitled to one free credit report each year from registered credit bureaus. Reviewing your report helps you understand your financial position and correct any errors that may affect your score.

The NCR also warns against unregistered lenders and informal borrowing. These often come with high interest and unfair practices. Always make sure the lender is registered with the NCR before taking credit.

Building a good credit record takes patience and discipline. By following NCR guidance, borrowing responsibly and paying on time, you can protect your finances and create better opportunities for yourself and your family.