At a time when financial literacy and good money management are more crucial than ever, First National Bank (FNB) is reshaping the conversation around credit; moving away from the traditional view of it as a financial trap that’s better avoided, to highlighting its potential as a key to unlocking a better life, if used responsibly.
The bank’s innovative stance is that when you choose the right credit solution, for the right reasons, and at an appropriate cost, and you bring your part by managing it well, it can be a powerful financial tool to help you achieve your goals.
Lytania Johnson, CEO of FNB Personal Segment, emphasises this ethos, stating, “Our mission at FNB is to partner with our clients, helping them to use credit not just as a financial tool, but as a steppingstone to realise their dreams responsibly.” This reflects FNB’s dedication to not only providing financial services, but also to empowering our clients with the understanding and resources they need to make credit work for them. As a result, we believe that responsible credit can enhance their lives and pave the way to the futures they desire, with confidence and clarity.
The value of this approach by FNB is evident from its credit issuance data. For the financial year ended 30 June 2023, the bank provided 464 615 of its clients with personal loans, which is a significant increase on the 444 322 issued in 2022. FNB also partnered with 35 678 South African families to provide them with the funding they needed to buy homes.
Johnson points out that these figures align with FNB’s purpose to provide its clients with the help they need to achieve their objectives and goals. “Our promise of ‘help’ is more than a brand commitment,” she says, “it’s a holistic approach to empower our customers in making informed decisions that align with their long-term goals. And our commitment to our clients is to help them leverage credit appropriately, and responsibly when they need to do so.”
Ester Ochse, Product Head at FNB Integrated Advice, concurs with Johnson and offers guidance on how the South African banking customers can enhance their creditworthiness and secure credit at favourable rates, particularly by focusing on maintaining a good credit history.
“A good credit score is your financial passport to obtaining credit at the best possible rates,” she explains. “At FNB, we take a holistic view of our customers’ financial health when assessing credit applications. This includes looking into various factors such as their payment history, the stability of their income, and possibly most importantly, their past and present credit behaviour.”
Ochse emphasises that there are several steps SA consumers can take to improve their credit score and increase their chances of being approved for credit at favourable rates.
“First and foremost, you must ensure that you pay your accounts, premiums, and debts on time,” she says. “This includes utilities, credit card bills, insurance premiums, store accounts, and any other recurring payments.” She suggests scheduling all these payments as debit orders to come off just after your salary is paid into your account every month, is a good practise to adopt.
Missing payments entirely is another big risk to your credit score identified by Ochse. “If you’re facing financial challenges and might miss a payment, be proactive,” she urges, “reach out to your credit provider to discuss a revised payment plan. This shows that you’re taking responsibility for your financial obligations and can help to maintain a good credit score.”
Ochse also advises against applying for multiple credit facilities within a short time frame. “Taking out too much credit in a short period of time can be interpreted as a sign of financial stress, potentially making you a higher risk to lenders,” she cautions.
Finally, she highlights the long-term impact of legal judgments on credit scores. “Dealing with legal proceedings regarding debt promptly is essential,” she explains, “because if you opt to ignore a summons related to a debt payment, this could lead to a court judgement against you, which will tarnish your credit record for years.”
Johnson and Ochse agree that one of the keys to ensuring people make good credit decisions is education. “We are committed to helping our clients fully understand the intricacies of credit,” she says, “and then to partner with them in ways that enable them to harness credit as an effective tool in achieving their personal and financial objectives.”
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