Prospective lenders and credit providers use your credit score to determine your ability to repay them. The credit score is normally determined by your payment history, the total debt owed, the length of time you have had debt and the number of recent credit applications. Based on your credit score, you will either be granted or denied credit in the form of loans, credit cards, bonds, store accounts and even cellphone contracts.

The best way to improve a poor credit score, or maintain a good one, is to pay off your debts on time, in other words, to pay what is due on or before the due date. Try to even pay more than what is required and make sure you never miss a single payment. Also only use debt for large and indispensable items (for example, home or car loans).

Different companies use different credit bureaus to calculate credit scores. However, all the bureaus track your loan repayment history and debt to work out your score, so your credit score on your Sanlam Credit Profile shouldn’t differ too vastly from other scores.

A credit score is a value that represents your history of punctual repayments on credit accounts, but also the total debt owed, the length of time you have had debt and the number of recent credit applications. Late payments, a high number of credit applications, a high value of debt, and time will affect your score negatively. When it comes to time, normally the longer you have credit, the better.

A credit report is a more comprehensive summary of your credit history and credit score, detailing when and where you have applied for credit in the past 24 months, the current balance of your credit lines and the monthly instalment. It will also highlight if you have had a judgment or a default (this is a written off account).