How To Nurse Your Credit Score Back To Health This Year

The Covid-19 pandemic has put Namibian consumers under major financial pressure. With nearly 15 500 employees losing their jobs in the past two years, many consumers have either had to dip into their savings or take on more credit to survive.

As a result, a growing number of consumers are at risk of missing payments or even defaulting on loans and financial obligations, which affects their credit scores negatively, said Lara Burger, the country manager of TransUnion Namibia.

“The problem is that having credit is practically essential to navigating a modern lifestyle. Few people can pay cash for a home, a car, education or big-ticket items. But when people battle to make their payments, it affects their credit scores, which will make it more difficult to get a loan or credit card in future. Thankfully, a credit history can be rectified over time by establishing better financial habits,” said Burger.

So, what do you do when your debt gets out of control, and you’re faced with adverse listings on your credit report? While a low credit score may affect your ability to get credit in the short term, it’s never too late to start remedying the situation.

Here are some steps you can take in 2022 to improve your credit profile.

Know how much you owe

Check your credit limits on your loans, accounts, credit cards and overdrafts, and then see how much you owe on each of them. One of the best ways to improve your credit score is to decrease the amount of credit that you’re using. Make a plan to pay off as much of your outstanding balances as possible: it will reflect on your score, and ease the pressure on your finances.

Pay your bills on time

The best way to build a good credit history and credit score is to make regular and timely payments. If you have loans, accounts and credit cards, dedicate the next year to making every payment on time. If you can pay more than the minimum payment in the process, that’s even better.

Stick to a budget

Now is a good time to work on your budget. By budgeting and paying your bills on time, you’ll be on your way to getting into great financial shape for next year.

Limit your amount of debt

Try to keep your utilisation of your current credit facilities to less than 35 percent of your limit. For example, if you have a credit card or a store account with a limit of N$ 995.26, try to maintain the amount owing balance at under N$ 348.34.

Check your credit report

You’re entitled to one free credit report every 12 months. Use it. Get a copy of your credit report from TransUnion and check it carefully for inaccuracies, like accounts that you don’t recognise or incorrect information about late payments. Disputing this kind of inaccurate information, and getting it removed from your credit report, can improve your credit health.

You can get your free credit report by calling +264 81 341 8727, or mailing SA_Namibia-FreeReport@transunion.com or Namibia-freereport@transunion.co.za. You can also visit TransUnion’s offices in Windhoek at 269 Independence Avenue, BPI House, 1st Floor, Room 114.