Applying to rent a home in South Africa requires completing an application form and providing a copy of your ID, proof of income, and authorization for the landlord or rental agent to access your credit report from one or more registered credit bureaus. This allows landlords to assess your financial responsibility and ability to pay rent regularly.

Your credit report contains details about your personal and credit history, current payments, account balances, and any adverse alerts. Credit bureaus in South Africa, such as TransUnion and Experian, use this data to calculate your credit score, which landlords and rental agents rely on when evaluating applications.

Why rental applications get declined

There are several reasons your application to rent a home may be turned down:

• Limited credit history: If you have never had credit or have minimal credit experience, landlords may view you as a higher risk.
• Insufficient income: Landlords assess your monthly income against your debt obligations to determine if you can afford the rent.
• Judgments or legal notices: Recent judgments, defaults, or adverse credit alerts signal financial instability.
• High balances on existing loans: Excessive debt can indicate financial overextension.
• Unverified information: Changes like moving or switching jobs without notifying creditors can raise red flags for landlords.
• Unstable work history: Frequent job changes or periods of unemployment may reduce your credibility as a tenant.

Action plan to improve your credit

To boost your chances of renting a home, follow these steps to improve your credit record:

• Check for inaccuracies: Review your credit report for errors and dispute incorrect information with the credit bureau to improve your score.
• Pay down overall debt: Lowering your debt-to-income ratio not only boosts your credit score but also improves your financial health.
• Pay off defaults: Settle defaulted debts to prevent further adverse listings. This may temporarily lower your score but will benefit you in the long term.
• Avoid multiple new credit cards: Opening too many accounts can harm your score and increase debt if not managed carefully.
• Seek professional advice: A financial advisor can guide you on managing your debt and improving your financial standing.
• Consider debt review carefully: While it can provide relief, debt review will negatively impact your credit profile and prevent you from taking on new debt during the process. Use this option only as a last resort.

How to get started

The first step to improving your credit record is understanding your current position. You are entitled to one free credit report per year from each of the major credit bureaus in South Africa, including TransUnion and Experian.

On your credit report, you will find details about your account payment history, balances, instalments, and any adverse credit information. This will provide a clear picture of areas that need improvement to regain a strong credit record.

Final thoughts

While overcoming bad credit and securing a rental property can seem daunting, it is achievable with the right approach. By taking steps to improve your financial position and working with a reputable landlord or rental agent, you can successfully rent a home and build a better credit profile over time.