Why keeping your finances in order will help you secure loans when you need them most

Nowadays, there's only one must-have essential that all South African consumers need, and it's not the latest cellphone or laptop - it's a good credit record...

In today's economy, you simply can't underestimate the importance of having a good credit record. Because, ultimately, this is the tool that lenders (such as banks, financial companies and credit corporations) use to determine whether or not to offer you a loan or extend your credit. It's also the reason why meeting your financial responsibilities has never been more important.

Your credit record is basically a record of your payment history - every payment you've made towards: store cards, Telkom, vehicle finance, cellphone contract payments.

So, if those payments have all been consistently and timeously met, then a good credit record will have been established - which can offer you a variety of benefits:

A good credit record means that should there come a time where you need additional credit to make a larger-than-usual purchase like buying a house or applying for a car loanyou'll be much more likely to get it. Or in the event that you require further loans, your good credit record will make the financial services provider you deal with more inclined to extend your credit, by offering you an additional personal loan.

A bad credit record means that you may have difficulty in getting the credit you need. In fact, failing to meet necessary payments could result in being blacklisted on the credit bureau. When this happens, you may be unable to get further credit - often for several years.

One of the simplest ways of improving (or establishing) a good credit record is to always ensure that you meet all your payments, on time, over a period of time. In the event that you find yourself unable to make a payment, don't just stop paying - rather let your creditor know immediately. More often than not, if a creditor is aware of your problem, they will try and help you work out a payment solution.

One alternative if you're struggling with lots of creditors is to look at taking out a consolidation loan, so all your loans are lumped together and you just make the one monthly payment.

So, to ensure that you're in a financial position to be granted the credit you need, make sure you always maintain a good payment history and that way you'll be much more likely to have access to the money you need, when you need it!