Beyond buying power: How your credit score shapes your future 

As South Africans brace for possible tax hikes and rising living costs, financial resilience will depend on strategic money management. In an unpredictable economy, understanding and strengthening one’s credit score has become a key pillar of financial stability and future opportunities. 

With the 2025 Budget Speech postponed, predictions of potential PAYE tax and VAT increases signal tighter financial conditions for consumers. In this climate, maintaining a strong credit score is more critical than ever – not just for accessing loans, but for shaping employment prospects and long-term financial security, writes Lerato Thwane, Head of E-Commerce, XDS, a division of Mettus.

How credit scores shapes your Future 

Historically, credit scores have primarily been used by financial institutions to evaluate an individual’s creditworthiness for loans, mortgages, and credit cards. A high credit score typically results in more favourable interest rates and loan terms, leading to potential long-term savings. In contrast, a lower score can lead to higher borrowing costs or even loan denials.

In recent years, however, the scope of credit score applications has expanded significantly. Landlords may assess a prospective tenant’s credit history to gauge their financial reliability, while utility companies might use credit scores to determine deposit requirements. Insurance providers also consider credit scores when calculating premiums, as they may view individuals with lower scores as higher-risk policyholders.

Additionally, employers – particularly those in industries such as finance and management – are increasingly incorporating credit checks into hiring decisions. This practice is based on the belief that financial responsibility is indicative of an individual’s reliability, integrity, and decision-making ability. As credit scores continue to influence various aspects of life, their broader implications raise discussions about fairness and accessibility.

Major purchases start with good credit

A strong credit score remains essential for major purchases. Whether you’re buying a home, a vehicle, or financing large appliances, lenders will assess credit scores to determine the risk associated with financing. Individuals with higher credit scores are often rewarded with lower interest rates, which reduces the total cost of the purchase over time. For example, securing a home loan with a favourable interest rate can lead to substantial savings over the loan’s lifespan.

Moreover, as the recently announced fiscal policies may influence lending practices and interest rates, staying informed about these developments can help consumers make strategic financial decisions, emphasising the importance of maintaining a good credit standing.

The intersection of credit scores and employment

 The use of credit checks in employment screenings is becoming increasingly common in South Africa. Employers contend that financial stability reflects a candidate’s reliability and integrity, especially for roles involving cash handling, company finances, or access to confidential information. A negative credit history may raise doubts about an individual’s ability to fulfil responsibilities or avoid financial pressures, potentially affecting their job opportunities. Additionally, employers may view significant financial distress as a potential conflict of interest, increasing the risk of fraud, bribery, or unethical decision-making in the workplace.

Five practical steps to enhance your credit score

 Improving and maintaining a healthy credit score requires deliberate effort and consistent financial habits. Here are actionable steps to guide you:

• Timely payments: Consistently paying bills on time is fundamental. Late payments can significantly impact your credit score. Setting up automatic payments or reminders can aid in ensuring punctuality.
• Manage credit utilisation: Aim to use a modest portion of your available credit. High utilisation rates can signal financial distress and negatively affect your score.
• Regular credit report monitoring: Frequently review your credit report to identify and dispute inaccuracies. In South Africa, consumers are entitled to one free credit report annually from each of the major credit bureaus.
• Diversify credit types: Having a mix of credit accounts, such as credit cards, personal loans, and retail accounts, can positively influence your credit score, provided they are managed responsibly.
• Consider credit-building tools: Utilising products designed to help build or rebuild credit can be beneficial. These may include secured credit cards or credit-builder loans.

Act now, benefit later

Your credit score is more than a number – it represents your financial reputation and credibility. In a world where lenders, landlords, and even employers use credit history to assess reliability, taking charge of your creditworthiness is one of the most powerful financial moves you can make.

Whether the goal is homeownership, a new job, or simply greater financial security, the time to act is now. Build, protect, and leverage your credit score – because in today’s world, it’s not just about what you can buy, but the life you can build.