05/10/2026
Your Credit Score and Your Next Car: What Every South African Buyer Should Know
Before you fall in love with the car
Your credit score decides whether the bank says yes, and how much that yes will cost you. Two people can buy the same car at the same price and pay very different amounts. Here is what the bank sees, and what the law says.
What your credit score is
Your score is calculated by bureaus such as TransUnion, Experian and XDS from your borrowing history. As a rough guide:
700 and above is strong.
650 to 699 is decent.
600 to 649 is borderline, with higher rates likely.
Below 600 is high risk.
Section 72 of the National Credit Act 34 of 2005 (NCA) lets you access your record and challenge wrong information. You get one free report from each bureau every 12 months.
What the bank must check
Section 81 of the NCA requires a lender to assess your repayment history, means and obligations before granting credit. The Affordability Assessment Regulations of 2015 require income verification, usually through three months of payslips or bank statements.
Credit granted without a proper assessment, or despite one showing you cannot afford it, is reckless under section 80, and a court may set it aside or suspend it under section 83. In SA Taxi Securitisation (Pty) Ltd v Mbatha 2011 (1) SA 310 (GSJ), the court held that a consumer raising this defence must lay a proper factual basis.
What a weak score costs you
On a R300,000 loan over 72 months, 11% interest costs about R5,710 a month, while 17% costs about R6,674. That is almost R70,000 more in total interest for the same car.
Before you sign
Get your free report and dispute errors.
Pay down cards and overdrafts first.
Apply once, through a dealer that submits to several banks.
Bring a deposit. For a borderline score, it often decides the outcome.
Be careful with balloons. They leave a large lump sum at the end.
Ask for reasons if declined. Section 62 entitles you to them.
Choose your own insurance. Section 106 allows this. In Lewis Stores (Pty) Ltd v National Credit Regulator, the Supreme Court of Appeal found that a lender had sold certain add-ons unlawfully.
If you fall behind
Section 129 requires a written notice before the bank can take the car. In Sebola v Standard Bank of South Africa Ltd 2012 (5) SA 142 (CC), the Constitutional Court held that the notice must probably have reached you. Kubyana v Standard Bank of South Africa Ltd 2014 (3) SA 56 (CC) added that you cannot ignore it.
Debt review under section 86 is an option if you are over-indebted, but section 88(1) generally bars new credit while you are under review (Nedbank Ltd v National Credit Regulator 2011 (3) SA 581 (SCA)).
The two sides of the deal
Grandson, no matter how thin they make a pancake, it still has two sides to it. The dealer shows you the car and the low instalment. The other side is the rate, the balloon and six years of payments. Look at both before you sign.
General legal education, not financial advice.
Melusi Xulu, Managing Director, Donda Attorneys Inc. | Kasi Lawyer, Imfundo Kwezomthetho