The importance of spending wisely and knowing your credit score

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(Image: Getty Images)
(Image: Getty Images)
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During the festive season, we are all bitten by the Christmas cheer that is often accompanied by the spending bug which results in us sometimes spending more than what we have or budgeted for. 

By the time the new year rolls around, some find themselves in quite a financial predicament and turn to loans to survive the three months of January. 

Milly Viljoen, the Director of Education, Awareness and Stakeholder Relations at the Gauteng Office of Consumer Affairs says consumers need to be careful when looking for loans. 

“When consumers fail to get approval for credit due to poor credit scores, they resort to borrowing from unregistered credit providers who violate their rights by keeping ID/SASSA to enforce repayments. Also, unregistered credit providers overcharge interest. All credit providers must be registered with National Credit Regulator, and unscrupulous lenders must be reported,” says Viljoen

The Gauteng Office of Consumer Affairs (GOCA) exists to protect and promote consumer rights in the Gauteng Province and administers the Provincial Unfair Business Practices Act, No. 7 of 1996 as well as the Consumer Protection Act, No 68 of 2008 (CPA). The GOCA does this by investigating cases of alleged unfair business practices, advising consumers of their rights and conducting consumer education workshops and programmes across the province. 

Viljoen advises consumers to only borrow when there is a need and to always plan their repayments before applying for credit to avoid financial stress and accumulating debt. 

According to data from global firm CEIC Data, South African household debt accounted for 40.7 % of the country's Nominal GDP in Sep 2022, compared with a ratio of 41.0 % in the previous quarter.

Know your credit score

A part of maintaining good personal debt is knowing your credit score.

“It is important to obtain a credit report or check your credit score on an annual basis, to check whether you are not negatively listed (known blacklisted). This will assist you to plan and settle your debts. Credit providers will not grant you credit if you are negatively listed. Your credit report will also show whether you are not a victim of identity theft where someone accessed credit using your details. This can be disputed free of charge,” says Viljoen.

Consumers can check their credit scores for free through any Credit bureau and can find a list of registered credit providers on

Tips for a good credit score:

  • Always pay on time e.g. the agreed date as per the credit agreement (not all creditors allow for receival of payments up to 7 days)
  • Don’t skip payments (borrow-from-Peter-to-pay-Paul)
  • Pay the amount that is agreed upon on the credit agreement.
  • Inform the credit providers in advance should there be financial challenges to rearrange their payments/debts.
  • If possible, pay more than the minimum payment required per month, to settle the debt quicker.
  • Dispute wrong information on your credit report – this means regularly checking your credit reports and acting timeously to resolve any errors.
  • To maintain a good credit score, one needs to have credit – however be careful and think twice before opening new accounts this will not help your credit score.

On average Viljoen’s office deals with +- 150 consumer-related complaints per month that range from faulty second-hand cars to home renovation contractor disputes and can help you with T&Cs on contracts/agreements/ store cancellation/refund policies.

“Consumers should not hesitate to contact GOCA should they be unsatisfied with the supplier of goods and services. Just because you owe does not mean your rights are not protected. GOCA works with different stakeholders to ensure that your rights are always protected. Transact confidently!” she says. 

For more information visit GOCA HERE

This post was sponsored by the Gauteng Office of Consumer Affairs and produced by Adspace Studio.

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