Building sound creditworthiness is critical for young professionals, especially under the current pressured economic environment in South Africa where it is becoming difficult to make ends meet.
“Young professionals may find themselves having to take on more debt for the tough times or as their financial support from parents or guardians shrinks,” explains Peter Muwanula, Head: Partnerships and Alliances at PPS.
Credit cards, if used intelligently, can bridge this gap while helping to build the user’s credit score.
“With a credit offering such as the PPS Credit Card, individuals are able to build a credit score, which will add value for making major purchases such as vehicle or property in the future.”
He explains further: “A healthy credit score can be achieved by using credit responsibly, which involves keeping careful track of all purchases and payments.”
Below are some important tips for building a good credit standing:
Make a point of paying bills on time
Paying debt late not only accrues interest on bills – and increases repayments – but can also be detrimental for credit profiles. If a bill cannot be paid on time, it is important to inform the creditor soonest and make alternative payment arrangements.
Regular credit report reviews
It is always a good idea for regular credit report checks to check for any errors, such as accidental charges for items or any fraudulent activities. Keeping watch over a credit score in the credit report is equally important. Credit scores are calculated on the basis of payment history, current levels of debt, type of credit accounts used, length of credit history and the number of credit enquiries.
Don’t take on debt to improve your credit rating
There is a common misperception that the more credit accounts one holds, the better the credit rating. This is quite the opposite if mismanaged. Debt should only be taken on if repayments can and are made on time.
Young professionals are encouraged to access their credit reports regularly. This is a free, annual service and available to all consumers as prescribed by the National Credit Act.
“At PPS, we believe that credit cards used intelligently will benefit individuals in the long-term by building their credit profile and credit score to be able to make those meaningful life changing purchases,” Muwanula concludes.
For more information about the PPS Credit Card visit: https://www.pps.co.za/card-payments/credit-card
PPS has more than 150 000 members who enjoy access to a comprehensive suite of financial and healthcare products that are specifically tailored to meet the needs of graduate professionals.
PPS is the largest South African company of its kind, exclusively for graduate professionals, that still embraces an ethos of mutuality, which means that it exists solely for the benefit of its members. Members receive profit allocations based on the qualifying life risk products they hold with PPS. Thus, PPS members with qualifying products could share in the profits of PPS Insurance, PPS Investments, PPS Short-Term Insurance and PPS Healthcare Administrators via annual allocations to the unique PPS Profit-Share Account. In addition, the more products members hold across these PPS businesses, the larger their percentage of earnings through the PPS Cross-Holdings Profit-Share Booster.
PPS membership provides access to the following tried, tested and trusted products and services: PPS Life Insurance, PPS Short-Term Insurance, PPS Financial Advisory, PPS Investments and Profmed Medical Scheme. Visit www.pps.co.za for more information.
PPS is a Licensed Insurer and Financial Services Provider.