How to improve your credit score and why it's important

PL

Paula Luckhoff

5 November 2025 | 19:43

Galileo Capital's Warren Ingram explains the ins and outs of a credit score, and how to build a good one.

How to improve your credit score and why it's important

Bills, credit, woman working on calculator. Pexels/Mikhail Nilov

We often hear about credit scores and why it is important to have a good one.

But how do you build a good rating, and then maintain and also improve it?

In a nutshell, a credit score is a number - from 0-743 or 0-999 depending on the credit bureau, used by banks or other businesses to determine how much of a risk it would be to lend you money.

The higher your score, the better your chances of getting credit.

It's a critical number for us if we live in the world of debt, says personal finance guru Warren Ingram.

"Your starting point is, you're not applying for debt for no reason, you want to buy a car or house or something so you want the highest score possible... If you have say an average score like 600 or 650 it doesn't mean that the bank won't lend you money, but they might say 'we're going to charge them a higher interest rate because we have to get paid for the extra risk that we're taking to lend to this person'."

Importantly, if you have a high score, you might benefit from a slightly better interest rate on the debt you take on, Ingram says.

WHAT AFFECTS YOUR CREDIT SCORE:
  • Your payment history (If you pay your debts on time you'll have a good score; if you're late with payments or miss them, it will harm your score.)
  • How much of your credit you use (If you use 100% of the credit on offer to you, your score will be lower.)
  • How long you have had accounts (If you have a long history of using e.g. a store account or credit card, it will improve your score. If you only have new accounts, your score will be lower.)
  • If you have a few different types of credit accounts and manage them well (e.g. a credit card, home loan or cell phone account)
  • Credit enquiries (If you open a lot of credit accounts at once, it will affect your score - these applications are on your history for two years)
HOW TO BUILD A GOOD CREDIT SCORE:
  • Start small. You can open a low-limit credit card account e.g. with R2,000 and only use a portion of the credit every month. 
  • Pay off the amount required on time (or early) every month.
  • Don't use 100% of the credit offered to you. Aim for 30% - 70% of the credit offered.
  • If you have no credit history and want to build one for a home loan in future, you can get a secured loan. You offer a savings account as collateral to the bank and they give you credit to the same value, so the risk is small.

Scroll up to the audio player to listen to Ingram's detailed advice

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