A negative credit score can affect career opportunities

By: Natasha Archary

A negative credit score can affect new career opportunities, particularly in the Finance sector.

Rapule Mahlangu, Head of Associations and Affinity Groups at Metropolitan joins Gugulethu Mfuphi on Kaya Biz to share why building a good credit score is important to securing that new job.

Being heavily in debt can leave one feeling shackled and unable to break free, especially when one is trying to break free from the cyle of bad debt by securing a job.

A negative credit score and being in debt can ruin one’s chances of a new career opportunity as most employers may opt to run a credit check for positions that are Finance related.

Rapule says the reason for this is so that employers can assess whether the candidate can manage their own finances before being given the role of access to company finances and budgets.

Here are 5 tips to help you improve your credit score:

Get on top of your credit repayments

How you pay your creditors is very important. You need to make sure that you pay your debts on time and the agreed minimum installments.

A payment that is received late may affect your score even if it is just few days late. Ensure that you communicate with your creditor in advance if payment will be made late before they add interest on your amount owing, which will only make your financial situation worse.

Work on getting a good mix of credit

A good mix of credit is crucial in helping you stand a better chance and to help you rebuild your score. There are 2 types of credit, secured debt and unsecured debt.

A Secured a debt is credit that is linked and protected by an asset, for example, home loan, vehicle loan, study loan, clothing accounts, personal loan, credit card and an overdraft.

They also are divided to long term and short term. In order to increase your score, a good balance of these accounts can help you to look good. Remember that unsecured debts are high interest bearing.

Inquiries

When applying for credit, a credit provider would go to the credit bureau to conduct an assessment before granting you credit. They also do this to assess how you manage your accounts.

When a provider does a check on you, that information would remain on your profile for about 2 years. Avoid multiple credit applications as it shows creditors that there might be something wrong with your finances and this does affect your credit score.

Duration of your credit profile

The longer you have had credit, the easier it is for creditors to assess your credit behaviour.

It is important to build a credit profile and maintain it well.

Credit usage

It is very important to insure that you do not max out the credit balance you have. If you have a credit card with a limit of R10 000, try to not go above it.

The same with a clothing account that has a credit availability of say R3 000, try and use below R1 200.

Always remember the higher the amount you take out, the higher your monthly repayment instalments will be.

It is advisable to settle these accounts within 6-months to avoid a higher interest on the amount owed.