How to Get Your Credit Ready for Your Next Car Purchase 

If you’re planning to buy a car on finance, your credit score will play a major role in determining the deal you qualify for. Lenders use your credit history to assess how reliable you are when it comes to paying back loans. A stronger credit score can help you secure a lower interest rate and increase your chances of approval. Here’s how to get your credit profile into shape before you apply for car finance. ​​

Understand How Credit Scores Work

In South Africa, credit scores usually range from 300 to 850. The higher your score, the better your chances of qualifying for affordable credit. Lenders will look at your payment history, how much debt you carry, the length of your credit history, and the types of credit you use.

Check Your Credit Report

Before applying, get a copy of your credit report from a bureau like TransUnion, Experian or Compuscan. You’re entitled to one free report per year. Go through it carefully, check for errors or outdated information, and dispute anything that looks incorrect.

Pay Bills on Time

Late or missed payments can harm your score. Make sure to pay all bills, including credit cards, store accounts, utilities and cellphone contracts, on time each month. Setting up debit orders or reminders can help you stay on track.

Reduce Your Debt

Try to keep credit card balances low and avoid maxing out accounts. If possible, pay down your existing debt before taking on a new car loan.

Limit New Credit Applications

Every time you apply for credit, an enquiry is added to your profile, which can temporarily lower your score. Avoid opening new accounts or credit cards right before applying for car finance. By following these steps, you’ll boost your credit profile and put yourself in a stronger position to get the best car finance deal possible