Understanding Money Behavior and Creditworthiness

When applying for any form of credit—be it a personal loan, credit card, home loan, or even rental approval—your money behavior and creditworthiness are closely reviewed by lenders and landlords.

But what exactly does this mean?

Money behavior refers to how you handle your finances: how much you earn, how much you spend, and how consistently you save or keep a positive account balance. Creditworthiness, on the other hand, is your ability to repay borrowed money reliably, based on your financial habits and credit history.

Let’s explore three powerful reasons why your money behavior has such a big impact on your creditworthiness.

1. Income Alone Isn’t Enough—Spending Matters

You might think earning more automatically increases your creditworthiness. That’s not always the case. Creditors don’t only look at how much money is coming in; they also want to know how much is going out.

For example, if you earn R5,000 every month but spend the full amount on bills, subscriptions, fast food, and other expenses, your bank balance will end the month at zero. Even with a good credit score, this could hurt your chances of getting approved for new credit.

Tip: To improve your money behavior and creditworthiness, try to maintain a monthly positive balance of around R500 or more. This shows you live within your means and can manage new repayments.

2. Self-Employed? Credit Gets Tricky

If you’re self-employed, your income may vary from month to month. While this isn’t a problem in itself, lenders consider it riskier than a fixed salary. Why? Because they want to see predictable, stable income and consistent financial management.

That means your money behavior and creditworthiness are even more important if you’re self-employed. You’ll need to demonstrate that your spending doesn’t exceed your income and that you can maintain a healthy bank balance — even during slow months.

Related article: How a Bad Credit Record Can Affect You When Renting

3. Lenders Want to See What’s Left After Expenses

Creditors look at your debt-to-income ratio — how much of your income goes toward expenses and how much is left. If your monthly budget is tight and leaves no room for repayment of new loans, your application may be declined.

That’s why one of the smartest financial habits is to track your expenses. This helps you identify where you can cut back and increase the amount left in your account every month.

Consider using budgeting apps or tools from the National Credit Regulator to monitor your financial health and improve your money behavior and creditworthiness.

Final Thoughts: Build Healthy Money Habits

Improving your money behavior and creditworthiness isn’t about earning more — it’s about managing better. Keep track of your income, spend wisely, and aim to keep a monthly surplus in your account. Not only will this improve your chances of getting credit, but it will also make renting, investing, and even saving easier in the long run.

Disclaimer: This article is for educational purposes only and does not constitute financial advice. For personalized advice, please consult a qualified financial advisor or credit counselor.