Avoid These Mistakes! Top Credit Score Killers in Gauteng

A strong credit score is the key to financial freedom. Whether you’re applying for a home loan in Sandton, looking to finance a car in Pretoria, or shopping around for a new credit card in Soweto, your credit score can either open doors or slam them shut. In Gauteng, where urban lifestyles often come with high living costs, maintaining a healthy credit score is more important than ever. However, many residents unknowingly make mistakes that can ruin their credit profile.

In this guide, we highlight the top credit score killers in Gauteng and how to avoid them.

ALSO READ: Credit Score 101: How to Build and Maintain a Healthy Credit Score in South Africa

1. Missing Payments

Missing even one payment can have a significant negative impact on your credit score. Payment history makes up the largest portion of your credit score about 35%. In Gauteng, where many rely on store accounts and credit cards to manage monthly expenses, forgetting to pay a bill can quickly become a habit.

How to avoid this mistake:

• Set up automatic debit orders for all your monthly accounts.
• Use calendar reminders or budgeting apps to track due dates.

2. Maxing Out Credit Cards

Using more than 30% of your available credit is considered high credit utilization. For example, if your credit card has a R10,000 limit and you’ve used R9,000, you’re hurting your score—even if you pay the minimum amount on time.

Gauteng tip: Many Johannesburg residents juggle multiple cards and store accounts. Prioritize paying off your credit cards first to reduce your utilization rate.

3. Applying for Too Much Credit at Once

Each time you apply for a new loan, credit card, or account, a hard inquiry is recorded on your credit report. Multiple applications in a short period can make you look desperate or financially unstable, lowering your credit score.

What to do instead:

• Space out your credit applications.
• Only apply for credit when absolutely necessary.
• Use comparison platforms that do soft checks instead of hard inquiries.

4. Closing Old Credit Accounts

Closing an old credit account might seem like a smart move, especially if it’s paid off. But it can actually shorten your credit history and reduce your overall credit limit, both of which negatively impact your credit score.

Best practice in Gauteng:
If you’ve paid off an account, keep it open especially if it doesn’t carry an annual fee. It shows a long, stable credit history, which is beneficial.

5. Ignoring Your Credit Report

Many South Africans don’t regularly check their credit reports, which means they might miss errors or signs of fraud. In Gauteng, identity theft is a growing concern, particularly in busy metros like Midrand and Centurion.

Solution:

• Check your credit report at least once a year through reputable platforms like TransUnion, Experian, or ClearScore.
• Dispute any incorrect information immediately.

6. Defaulting on Loans

Defaulting on a personal loan, car loan, or mortgage can have devastating consequences for your credit score. Lenders view this as a major red flag.

Local tip: If you’re struggling with loan repayments in Gauteng due to job loss or rising living expenses, contact your creditor before you default. Many offer hardship programs or payment holidays.

7. Co-Signing Loans Without Caution

If someone you co-sign for defaults, the responsibility falls on you—and your credit score will suffer. This is a common issue in Gauteng where family or friends might need a helping hand.

Advice:

• Only co-sign if you can afford to take on the debt yourself.
• Ensure the primary borrower is financially responsible.

Maintaining a good credit score in Gauteng takes discipline and knowledge. Avoiding these common credit mistakes can help you stay financially stable and boost your chances of qualifying for better interest rates and credit opportunities.

Key takeaways:

• Pay all your bills on time.
• Keep your credit card balances low.
• Monitor your credit report regularly.
• Don’t apply for too much credit at once.

Your credit score isn’t just a number it’s a reflection of your financial habits. In a fast-paced province like Gauteng, staying informed and avoiding these pitfalls can make all the difference to your financial future.