{"id":57587,"date":"2026-04-29T15:57:05","date_gmt":"2026-04-29T15:57:05","guid":{"rendered":"https:\/\/eduzim.co.zw\/news\/?p=57587"},"modified":"2026-04-29T15:57:05","modified_gmt":"2026-04-29T15:57:05","slug":"understanding-good-and-bad-credit","status":"publish","type":"post","link":"https:\/\/eduzim.co.zw\/news\/2026\/04\/29\/understanding-good-and-bad-credit\/","title":{"rendered":"Understanding good and bad credit"},"content":{"rendered":"<p> <script data-jetpack-boost=\"ignore\" async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-1669381584671856\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- Africa tv video display -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-1669381584671856\"\r\n     data-ad-slot=\"3579572842\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script data-jetpack-boost=\"ignore\">\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div>\n<p>Tough times lie ahead for many South Africans as electricity and fuel prices continue to rise, and uncertainty over whether the South African Reserve Bank will increase interest rates adds further pressure.<\/p>\n<p>National Debt Counselling Association chairperson, Ren\u00e9 Moonsamy, warns that the consequences for people with little or no financial wiggle room are already apparent, with applications for debt counselling in April already significantly up compared to last year.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-to-borrow-or-not-to-borrow\">To borrow or not to borrow?<\/h2>\n<p>She said people have limited options when faced with rising costs: make use of the \u2018two-pot\u2019 pension system to dip into retirement savings, access more credit, or a combination of the two, or seek help from a debt counsellor to restructure debt and get protection from creditors.<\/p>\n<p>\u201cThe reality is that we\u2019re going to see people borrowing more,\u201d said Moonsamy. \u201cIn this context, understanding debt and the distinction between so-called \u2018good\u2019 and \u2018bad credit\u2019 is important.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-difference-between-good-and-bad-credit\">Difference between good and bad credit<\/h2>\n<p>She emphasises that credit itself is neutral. \u201cIt is not the type of credit that is the issues,\u201d said Moonsamy.<\/p>\n<p>\u201cWhat characterises it as \u2018good\u2019 or \u2018bad\u2019 is what it is used for, how much it costs, and whether the consumer can afford it.\u201d<\/p>\n<p>\u2018Good\u2019 credit is affordable, well-managed and used for productive purposes that improve your long-term financial stability.<\/p>\n<p>\u201cFor example, buying a car to get to work or generate an income, furthering your education or paying for a renovation to add value to your house,\u201d she said.<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-how-to-keep-good-credit-score\">How to keep good credit score<\/h2>\n<p>For one to keep good credit, payments should be affordable relative to one\u2019s income, and the interest rates should be in line with a consumer\u2019s risk profile. Also, making payments on time allows you to build a positive financial record.<\/p>\n<p>\u201cMaking payments on time will enable you to access financial products at better rates, because your credit score shows you are financially reliable,\u201d said Moonsamy.<\/p>\n<p>\u201cThe National Credit Act requires lenders to ensure applicants can afford credit before approving it. At the same time, consumers need to be truthful when applying for credit about their incomes and expenses.\u201d<\/p>\n<h2 class=\"wp-block-heading\" id=\"h-unaffordable-borrowing\">Unaffordable borrowing<\/h2>\n<p>Moonsamy said \u2018bad credit\u2019 is unaffordable, high-cost or poorly managed borrowing, usually for short-term consumption that adds no lasting value.<\/p>\n<p>Examples include using credit to fund lifestyle or basic living expenses, or taking new credit to repay old loans.<\/p>\n<p>\u201cIn simple terms, \u2018good credit\u2019 helps you acquire assets and achieve financial stability and sustainability in the long term, while \u2018bad credit\u2019 is usually unaffordable, often used for short-term consumption and damages your credit record.<\/p>\n<p>\u201cThere\u2019s nothing inherently wrong with credit. It\u2019s integral to a functioning economy. What\u2019s important to understand is whether it benefits you or not.\u201d<\/p>\n<\/p><\/div>\n<div>\n<h3>Support Local Journalism<\/h3>\n<p>Add The Citizen as a Preferred Source on Google and follow us on Google News to see more of our trusted reporting in Google News and Top Stories.<\/p>\n<\/div>\n<p><script data-jetpack-boost=\"ignore\" async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-1669381584671856\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- Africa tv video display -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-1669381584671856\"\r\n     data-ad-slot=\"3579572842\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script data-jetpack-boost=\"ignore\">\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n#Understanding #good #bad #credit<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tough times lie ahead for many South Africans as electricity and fuel prices continue to rise, and uncertainty over whether&hellip;<\/p>\n","protected":false},"author":1,"featured_media":57588,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[],"class_list":["post-57587","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mzansi"],"_links":{"self":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts\/57587","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/comments?post=57587"}],"version-history":[{"count":1,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts\/57587\/revisions"}],"predecessor-version":[{"id":57589,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/posts\/57587\/revisions\/57589"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/media\/57588"}],"wp:attachment":[{"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/media?parent=57587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/categories?post=57587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eduzim.co.zw\/news\/wp-json\/wp\/v2\/tags?post=57587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}