What type of debts affect your credit score and how?

The simple answer is all debt…

Unless you borrow money from a friend or relative, all and any debt will appear on the records of the credit bureaus. Put another way, any loan, credit, or finance through a registered financial service provider or registered credit grantor will affect your credit score.

They will able to track the details of all loans or credit agreements. They will have aces to open balances, current installments, payment history, and total debt.

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This include:

  • Home loans
  • Vehicle finance
  • Personal loans
  • Hire purchase agreements
  • Bank accounts
  • Overdrafts
  • Credits cards (including medical credit cards)
  • Store cards
  • Cellphone contracts
  • Vehicle tracking accounts
  • Gym contracts
  • Unpaid contracts such as funeral policies
  • Other service accounts for which you have agreed to a contract
  • Surety or guarantees signed on behalf of a third party that have been defaulted on
  • Another form of debt that could be handed over and appear on your credit report is unpaid medical or dental accounts.
  • Other accounts requiring monthly payments such as Telkom, Multichoice, and other internet service providers (assuming they are not prepaid)

The data on your credit score is not just for current or active accounts. Historical data will also appear on your credit profile and affect your score.

There are a handful of companies that chose not to give out this data but they are few and far between.

The main factors the credit bureau will look at when determining your score:

  • Amounts owed / Account Utilization
  • Payment History
  • Age of Accounts
  • Judgments and Defaults
  • Payment status of your account

If you are unsure, the best bet is to obtain a copy of your credit report and see exactly what appears there.