How to build credit score

[roldfox]

Hi there, I’d like some advice on how to build my credit score.

Something inside me told me to check it the other day, so I checked ClearScore and saw that my credit rating is -1. I guess that’s bad, so I’d like to do better. I’m 27 and have only been working my first real job for the last 6 months, so I know nothing about credit. I was thinking of getting a store account at Markhams or something, but I’ve heard horror stories about those, so I’d appreciate it if I could get some good advice.

Thanks in advance

UPDATE - April 2024

I decided to get the credit card, I’ve been using it for my monthly expenses and paying it off every month, my credit score went from -1 to 625.

 

[ledlites]

@roldfox I would suggest getting a credit card. However this takes incredible discipline and might not work for everyone. I use my CC for all of my card transactions, petrol, groceries, eating out and so on.
I then completely pay it off at the end of each month to avoid being charged any interest. My clear score went from -1 to 648 in 8 months just by using my credit card.

The downside to this is there are some bank charges associated with having a credit card.

 

[whitesue]

@ledlites IF you are able to be financially disciplined, this is the best way.

Preferably do not get a store card (for now anyway).

And remember ANY credit you get is NOT FREE MONEY, it's just an opportunity to get into debt, so be VERY VERY CAUTIOUS and disciplined with credit!

 

[colaflavourchewits]

@roldfox Ask your bank for a credit card and get the lowest amount of credit possible. I qualified for more but told them I only want R4k. For six months, all I did was transfer R1 200 from the credit card into my cheque account and then transfered it (the full R1200 and sometimes R1300 to cover the service fee of R50) back before the 1st. I went from -1 to 638.

 

[karma777]

@colaflavourchewits This is not a good idea, transferring funds out of your credit card attracts interest immediately. The best way is to use the card for your monthly expenses, actually swipe or tap then pay off the card in full at the end of each month. If your monthly expenses are R5k, get a limit of R10k. This way from the banks perspective you only use 50% of your limit which shows good financial discipline.