Loans With Bad Credit In South Africa

Today I'm going to help you understand what does it mean to have bad credit in South Africa.

People often think having a low credit score means bad credit history which is incorrect.

Without wasting your time, let's dive right in.

What does Bad Credit mean?

In short, it means you have a very low credit score to be trusted with a loan.

Banks and other institutions offer unsecured personal loans based on your credit history and other credit signals.

So, if you have poor credit, you'll be considered high risk and limited access to personal loan applications. Some companies don't offer loans for bad credit (blacklisted), and some do offer loans at a higher interest rate.

Why is your credit score so low or poor?

You've perhaps lost your job due to COVID 19 or other financial circumstances that resulted in not honoring your credit accounts.

Or you don't have a credit history at all, which means there are credit providers who have no information to check against when offering you a loan.

This is not the end of the world, you can still improve your credit score over time however, for now, you just need to understand you have limited opportunities when applying for personal credit loans.

How To Check Your Credit Score

Many of the people in South Africa don't know their current credit score - it's very common to loan seekers.

You're entitled to one free credit report per year, and various organisations in the country offer credit reports for free.

Try the following to get your updated and most recent credit score.

  • ClearScore.com
  • CompuScan.co.za
  • TransUnion.co.za
  • CreditReportSA.co.za
  • MyCreditCheck.co.za

Use the information in the report to rebuild and improve your score before applying for the next credit or loan with bad credit.

And this is the information banks and other credit providers use to decide to offer you a loan.

Improve Your Credit Score

You can never get the best loan rates with bad credit score - unfortunately.

Instead of trying to get a cash loan for blacklisted, perhaps it's time to build up your credit score once and for all.

Pay bills - start focusing on paying your accounts on time every month. This will indicate to lenders that you're trying to fix your past poor financial decisions.

Fraud - Look out for fraudulent activities in your credit report and clear your name.

Discipline - Stop using credit cards more than you need to. Attract banks and lenders by spending less on your credit card and paying more each month to boost your credit score.

Loans for Bad Credit

As indicated, there are financial companies in South Africa that offers loans for blacklisted people.

Before lending you money, they consider a lot of factors on top of your credit score and offer a high-risk interest rate.

Here are the top 5 companies that offer loans for bad credit in South Africa.

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