Take control of your financial health 

We are nearing the end of the first quarter of 2017 and you made a  resolution to take care of your financial and credit profile this year. How are you doing? Do you need to reduce your debt but don’t know where to start? It’s important to take control of your finances before your commitments spiral out of control. A key component of financial health is understanding your credit score. Garnet Jensen, senior director at TransUnion shares the following guidelines for managing credit to maximise financial health. 

Know where you stand

The first step to financial security is to understand your financial situation. By obtaining your credit report online from transunion.co.za, you can safely and easily assess your credit history.

A credit report is a detailed record of how you manage your money. The report includes the names of companies that extend loans, credit limits, and a payment history. The information in the report is calculated to create a three-digit credit score. A credit score is used by credit providers in addition to their own methods to assess your credit risk, and can provide access to new loans. Understanding your score and your credit report will help you understand the factors impacting your credit, and the steps that need to be taken to build or maintain financial health. 

 The most important factor in building or maintaining a credit score is to pay bills on time and in full each month. Payment behavior, enquiries, negative listings and the total debt to credit ratio are also foundational to overall financial health. 

 Check your report carefully

 It’s imperative to check your credit report every 6-12 months to ensure the information is accurate and up to date. Regular credit monitoring can help lessen the risk of identity theft, but it’s important to keep in mind that not all creditors report to all the bureaus, so the information included in your report may vary by bureau.

 Write down your responsibilities

Use your credit report to make a list of all your active accounts and analyse your monthly spend in each. Once you have sight of your accounts, write down your monthly income and payment responsibilities, including food and transport costs. This will allow you to understand your payment obligations, and take steps to ensure you have adequate funds to make payments on time and in full each month.

Compare your income and your spend

Look closely at your income against your monthly expenditure to see if you can save at least 10 percent of your spend. Use methods such as determining the must haves with the nice to haves. This will provide clarity around where to cut down on spending to help you achieve your goal of reducing your spending and preserving funds for timely repayment of your financial obligations.

Don’t waste your savings

 If you manage to cut down your spending, make a conscious effort to put it towards paying off any debt. Late payments can have negative credit score impact, so it’s important to pay your debts on time and in full each month. This may require putting your saved money into a separate savings account where it can be used for that sole purpose.

Pay priority debts first

 Pay off any debts with high interest rates first. Priority should be on accounts with a high debt to credit ratio, debts that are close to being paid off or those with high annual fees. Many of these types of debt can incur higher fees so it’s best to tackle those before others.

Organise your payment dates

 Create a payment calendar or set smartphone alerts to make sure you never miss a payment. Include due dates and payment amounts of every account that you are responsible for to ensure all financial obligations are paid on time and in full each month. By organising your payments carefully you can ensure you are managing your debt carefully and not letting it manage you.

About TransUnion

We are a trusted provider of global information solutions for assessing and managing risk, driven by a belief that information can help advance our industry, facilitate commerce and ultimately increase the standard of living for consumers around the world. In that light, we see information differently—not just for what it is, but for what it can help people accomplish. Because when businesses and consumers have access to more complete and multidimensional information, they can make more informed decisions and achieve great things.

We call this Information for Good. TransUnion.co.za