New free App will help consumers manage finances better

A new free App was launched on Get Smart About Credit Day on Thursday that will help consumers to manage their finances better while also educating them how to make the right decisions.

The App, called Up, was developed by Experian to help South Africans take control of their financial health. The web-based app combines financial education, budgeting tools and credit reporting features.

With this App consumers can access their Experian credit report and credit score at no cost, enabling them to ensure all personal and credit exposure information is accurate while staying informed and up to date on their credit profiles.

The budgeting tool in the app also provides a consolidated view of your finances, helping you to assess your ability to afford additional credit facilities while the growing UpLift partner platform provides the opportunity for consumers to create healthy habits through savings and investments, understanding their expenses and learning about tax.

Developing healthy credit habits and actively managing your personal credit report and credit score are essential for navigating today’s economic landscape, Jaco van Jaarsveldt, head of commercial strategy and innovation at Experian Africa, says.

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Tools and knowledge in app to control your finances

“Up offers South Africans the necessary tools and knowledge to take control of their financial well-being and improve their credit standing. Building a solid foundation for your financial future and staying resilient in economic challenges is possible with the right tools and resources.”

According to Experian’s Consumer Default Index for the second quarter, South Africa’s 25 million credit active consumers account for just over R2 trillion of outstanding debt. The index, which tracks the rate of increase in consumer first payment default, steadily increased over the past six quarters across all consumer affluence segments.

Van Jaarsveldt says this highlights how the challenging economic climate has made it increasingly difficult for many South Africans to manage their finances effectively.

“Consequently, lenders have become more cautious in approving credit applications due to concerns about consumers’ affordability, primarily due to the high consumer price inflation rates (especially with regard to food and fuel costs) and prevailing high interest rates in the market.”

Therefore, he says, individuals who took risks with credit by taking up loans they could only just afford are now experiencing the costly consequences, such as not paying on time or skipping payments.

“Aside from the immediate financial impact, mismanaging credit can have long-term repercussions, including limited eligibility for future credit lines for significant investments like home loans, vehicle finance, or emergency funding.”

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Bad credit record can affect your chance of getting a job

Van Jaarsveldt warns that it can also affect your employment prospects.

“Therefore, it is crucial to prioritise developing healthy credit habits, engaging in sound financial management and understanding how to manage and build your personal credit report and credit score.”

Get Smart About Credit Day emphasises the need to reflect on and take control of your financial behaviour, regardless of whether you are starting your credit journey or have been credit active for a considerable time.

“This self-reflection may involve reviewing your credit report to make sure it accurately reflects your personal information and debt exposures, monthly statements, assessing interest rates on accounts, monitoring credit scores regularly and actively working towards reducing debt.”

The significance of credit access cannot be overlooked, Van Jaarsveldt says.

“Lenders use different scoring models when evaluating individuals, assigning varying weights to different factors to determine credit scores.

“While there is no universal measure of a “good” score or a specific number that guarantees loan approval, a higher credit score generally indicates greater creditworthiness and therefore your goal should be to increase your credit score through responsible credit behaviour.”