Taking the best route to a better loan

TransUnion has brought to light the fact that more women are becoming owners of businesses, and as we know it’s a struggle to get a loan to kick off their business or just to simply keep it afloat.

According to the Small Enterprise Development Agency (SEDA), the number of female entrepreneurs in South Africa is on the rise, with more than 60 per cent of micro-enterprises and 40 per cent of small enterprises in the country owned by women.

“Part of the problem is that in South Africa, lenders often rely on the personal credit records of the owners to assess their risk of lending, even though business credit reports are often available. So even if your business is strong, having a good personal credit score remains important,” stated Garnet Jensen, a senior director at TransUnion Africa.

TransUnion provided five tips to help owners with their credit score.

Tip Number 1 is to check your credit report and fix any mistakes. Owners often have errors on their credit reports that affect their credit scores. “You can get a free report every 12 months from a credit bureau like TransUnion. Request your report and check for mistakes, such as payments marked late when you have paid on time or negative information that’s out of date”, said Jensen.

Tip Number 2 is to build a record of on-time payments.

Tip Number 3 is to live within your credit limit. TransUnion stated that owners should try to keep their use of their current credit facilities to less than 35 per cent of their limit.

Tip Number 4 is to keep it easy on the credit applications as too many applications in a short space of time have an effect on your credit score.

Tip Number 5 is to build records for your personal and business credit profile. “Many good businesses go under because of poor record-keeping and an inability to secure funding. Get into the discipline of keeping solid books from the start – you’ll be grateful in the long run,” concluded Jensen.