Learn how your credit score affects your access to loans – and what you can do to boost it.

Your credit score plays a major role when applying for credit in South Africa. It not only determines whether your loan gets approved, but also what terms and interest rates you’ll be offered. Understanding how credit scores work – and how to improve yours – can make a big difference when navigating the financial system.

What Is a Credit Score – and Why Does It Matter?

A credit score is a three-digit number that reflects your financial behaviour. It’s calculated by credit bureaus like TransUnion or Experian, based on your payment history, debt levels, types of credit, and other data.

In South Africa, credit scores typically range from 330 to 850, with higher numbers indicating stronger financial reliability. Lenders use your score to assess how likely you are to repay what you borrow.

A good credit score helps you:

• Qualify for loans and credit cards
• Get lower interest rates
• Access larger credit amounts
• Improve trust with landlords or even employers

What Affects Your Credit Score?

Your credit score is made up of several components:

• Payment history (35%) – Have you paid your accounts on time?
• Amount owed (30%) – How much of your available credit are you using?
• Length of credit history (15%) – How long have you had active accounts?
• Credit mix (10%) – Do you have a range of credit types (loans, credit cards, etc.)?
• New credit (10%) – Have you recently applied for or opened new accounts?

Understanding these factors can help you take control of your financial health and build a stronger credit profile.

Credit Scores in Action: Loan Approvals and Terms

When you apply for a loan, lenders assess your credit score to decide:

• Whether to approve your application
• What interest rate to offer
• The length and flexibility of repayment terms

Higher credit scores = lower risk = better loan offers.

On the other hand, a low score can limit your options or lead to higher costs.

How Lula Lona Supports Credit-Aware Borrowers

Lula Lona is a loan comparison platform that helps South Africans find suitable financing options. The service takes your credit profile into account to match you with offers that align with your score – so you don’t waste time applying for loans that won’t be approved.

Lula Lona also empowers users with educational resources, helping borrowers understand their credit position and make smarter financial decisions.

Tips to Improve Your Creditworthiness

Improving your credit score won’t happen overnight, but small consistent steps can make a lasting difference:

1. Pay On Time

   Missed payments hurt your score. Set reminders or debit orders to stay on track.

2. Keep Your Balances Low

   Try to use less than 30% of your available credit limit.

3. Review Your Credit Report Regularly

   Get a free credit report from South African credit bureaus. Fix any mistakes and monitor your progress.

4. Limit New Credit Applications

   Each application results in a “hard check.” Too many in a short time can reduce your score.

5. Use a Mix of Credit Types

   Having a blend of loans and revolving credit (like store cards or credit cards) shows you can manage different types of debt – if handled responsibly.

Final Thoughts

Your credit score isn’t just a number – it’s a reflection of your financial habits and reliability. By understanding how credit scores influence loan decisions and taking steps to improve your credit profile, you open the door to better loan terms and stronger financial opportunities.

Tools like Lula Lona make the process easier by helping you compare relevant loan options, understand your credit position, and apply with confidence.

Take charge of your credit. A healthy score today can lead to a more secure tomorrow.