WATCH | How to use credit intentionally and build financial freedom

You need credit to get credit.

How old were you when you found that out, and how many times have you heard it since then?

Whether you’re planning to buy your first home or car or even to get a personal loan, the bank needs to see your credit record to assess whether you have a good track record.

With rising food costs, many South Africans are borrowing money just to put food on the table.

Experian Africa’s head of legal and compliance, Sikhulule Mabece, says their latest Consumer Default Index (CDIx) report reveals a critical shift in the country’s credit landscape.

“On one hand, consumer appetite for credit is at a record high, signalling widespread ambition to invest, grow, and improve quality of life,” says Mabece.

“On the other hand, lenders are becoming cautious, with approval rates continuing to decline.

“While the opportunities you seek are available, the gatekeepers are more selective than ever. In this environment, your creditworthiness is not just a factor; it is the primary key to accessing financial products. A strong, well-managed credit history is no longer a ‘nice-to-have’ but a non-negotiable asset that separates you from your goals.

Disciplined management is about control and consistency. Think of it like going to the gym. It’s not about one big effort, it’s about small, smart habits, repeated overtime.

—  Sikhulule Mabece, Experian Africa’s head of legal and compliance

“Our data also uncovers a deeper, more telling trend. An increasing number of South Africans, including those in traditionally secure, high-affluence groups, are relying on credit to bridge the gap between income and the rising cost of living. The CDIx shows that credit card and retail loan utilisation is on an upward trajectory, not just for luxury spending but for managing day-to-day financial pressures.”

The report shows that this quarter, there was a “rebound in activity, reflecting renewed market appetite” following a decline in applications received.

“However, approved applications continued to decline, indicating that lenders are becoming more cautious or tightening approval criteria,” the report reads in part.

“The rise in rejected applications further signals stricter credit assessments, likely driven by evolving risk management practices amid volatile macroeconomic conditions.”

Mabece says that while “credit is a vital tool, this growing dependency highlights the urgent need for disciplined management”.

“Disciplined management is about control and consistency. Think of it like going to the gym. It’s not about one big effort; it’s about small, smart habits, repeated over time. It means using credit with intention, not emotion, and always staying in charge of your money, not the other way around.

“You can achieve this simply by knowing your numbers. Track your spending so you know where your money goes, then create a simple budget, a plan for every single rand you earn. Most importantly, live within your means. If you can’t afford something today, you should always think twice [about taking credit for it] because you may struggle with the repayments tomorrow. Make an informed choice about things you are signing up for,” says Mabece.

He says discipline comes from planning and sticking to that plan.

Without a clear strategy, he says, what slowly begins as a solution to make ends meet can quickly become a cycle of debt.

“[That cycle is] eroding the very financial freedom you seek to build. Your credit report has evolved from a simple historical record into your most vital financial dashboard. It is a dynamic reflection of your financial habits and the single most influential document determining your access to future opportunities,” says Mabece.

“A healthy credit profile is the key that unlocks better interest rates, higher chances of approval, and the financial flexibility to negotiate from a position of strength. Taking control of this information is the first and most critical step toward genuine financial freedom. It allows you to move from being a passive subject of economic conditions to an empowered architect of your financial life.”

Mabece says in SA’s challenging economy, waiting for conditions to improve is not a strategy.

“The keys to financial freedom are already in your hands: they are the insights held within your own financial data. By understanding and acting on this information, you equip yourself not just to survive economic pressures but also to build a stronger, more resilient financial future.”

Mabece’s tips to help you build your financial freedom:

Get your financial blueprint: You cannot plan a journey without knowing your starting point. Access your credit score and report to get a clear, comprehensive view of your financial standing. Review it regularly for accuracy and to track your progress.

Decode your credit health: A score is just a number; the real power lies in understanding what drives it. Identify the key factors influencing your credit profile, such as payment history, credit utilisation, and the age of your accounts. This knowledge empowers you to make informed decisions.

Build your strategy: With this knowledge, you can build a clear path forward. Prioritise on-time payments, manage your credit utilisation effectively, and create a plan for reducing high-interest debt. These consistent, positive actions are the building blocks of a powerful credit history.

Sowetan