If you have entered the world of credit, you may have been warned that you need to protect your credit score. However, there are several things that won’t impact your score.
We have a look at a list of actions that won’t harm – or improve – your credit score, and we also briefly consider actions that will.
Tip: Your credit score could grow. Join CreditSav to get access to your credit score right now.
Which actions don’t impact your credit score?
According to Annelene Dippenaar, chief legal and compliance officer at Experian South Africa, there are five main actions that won’t impact your credit score. They include:
1. Paying bills that are not reported to the bureau. There are many types of bills, from subscriptions to streaming platforms that are not submitted to the bureaus.
2. Checking your own credit report. You can access your report as often as you’d like. Some bureaus, such as Experian, offer platforms on which you can access your full credit report for free.
At a minimum, all South African consumers are entitled to a free credit report every 12 months from the credit bureaus. Platforms such as CreditSav offer unlimited access at no charge.
3. Your income, or how much you earn. Your salary doesn’t have any direct impact on your credit score. It’s not used in the calculation of the score, nor is it stored on your credit profile.
However, if your income is reduced and you suddenly miss payments on your credit accounts, that may well affect your score.
4. Having debit card charges. Debit cards aren’t credit cards. Making payments with your debit card uses your actual money. Remember to budget, so that you know what you’re spending.
5. If you get married. Your spouse’s credit score won’t affect your score. However, if they have a good score or credit profile and you make a joint application, such as for a bond, this could improve your chances of being successful in your application.
6. Being declined for credit. Credit bureaus don’t record if a credit application is declined. If your application is approved, a credit bureau will only get information on your payment behaviour.
If an application is declined, this information isn’t sent to the bureau. The fact that you have applied for credit, however, will be available on your report for 12 months.
These actions will impact your credit score
Dippenaar points out that there are many actions that do, in fact, impact your credit score. She outlines some of the main ones below:
- Having too many accounts and maxing out their limits could potentially damage your credit score.
- Missing payments on debt is also a sure way to damage your credit report and score, as this creates adverse information on your report.
- Paying a lumpsum on an account and then skipping payments after could also be seen as negative behaviour, even though the account is technically not in arrears, as some scoring models look at monthly payment activity.
- Other adverse actions, like having a judgment on your profile or going under debt review.
- Enquiries for credit information performed by lenders when you apply for credit. Multiple credit enquiries can affect your credit score since it’s seen as risky behaviour.
You can get your credit score any time for free, through CreditSav.