Adulting can be hard – and expensive! It’s tricky balancing student loan repayments, rent, cellphone bills, and the expense of building a work wardrobe. But, you can make all of these costs and expenses work for you and build a solid credit record that’ll stand you in good stead when you want to buy a car, rent a bigger apartment or even buy a home of your own.

Craig Newborn, CEO of PayJustNow, a buy-now pay-later (BNPL) provider that gives young people the opportunity to enter the credit market safely, says it’s entirely possible to build a credit profile without falling into a debt hole that’s hard to dig out of.

Newborn shares six tips for turning expenses into building blocks for the credit record you’ll need to pay for life’s big investments.

1. Ditch pay-as-you-go
When you have a mobile contract, your payment history is reported to the credit bureau (which collect all your payment records to form your credit record or score). Getting a contract for your phone, and always paying the amount due on time and in full, is an easy way to start building a credit score.

2. Pay your student loan
If you’re paying off a student loan, ensure you have enough money in your bank account for that all-important monthly debit order. Not only does making debt payments on time help boost your credit rating, but debit orders that ‘bounce’ incur a fee from the bank.

3. Do rent right
If you rent from a leasing agency that automatically reports rental payments to a credit bureau, such as PayProp or TPN, or from a private landlord who participates in an official rental reporting programme, your rent payments help build your credit score – and the credit scores of 80% of tenants improve when their rental payments are included in their credit record calculations1.

4. Borrow credit
A credit card is just about the most expensive form of debt out there because the interest on repayments is so high. But, becoming an authorised user on someone else’s card is a great way to access emergency funding without the debt stress. Just make sure to pay back whoever is letting you use their card… Or run the risk of ruining the friendship forever.

5. Pay attention to the interest
When seen in isolation, interest and payments on different cards and accounts can look easy to manage. But the whole picture may tell a different story. The trick is to not over-extend yourself. Make sure you can meet all your debt responsibilities, every month.

6. Buy-now pay-later
When furnishing your first rental home, investing in expensive tech like a laptop, or upgrading your wardrobe to kickstart your career, use a responsible BNPL provider for a low-risk path into the credit market. A reputable BNPL provider will make big purchases more accessible and less of a financial risk, and should also feed your payment history to the credit bureau and report to SACRRA (the South African Credit and Risk Reporting Association).

Newborn says that PayJustNow’s model is a budgeting tool that’s designed to help you make your money go further, without creating debt that you can’t handle: “Our aim is to change the South African retail credit landscape by giving consumers a better way to pay for their goods. PayJustNow empowers responsible consumers to be more financially savvy.”

It works because shoppers spread the cost of their purchases across three months, with no interest and no fees, but receive the goods immediately. PayJustNow has also recently launched a Deals Page, so for those on a budget, it allows you to browse merchant offers and promotions so you get can the best deals.

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What is a credit score, actually?

Your credit score is a number that helps lenders to see how much of a risk they would be taking by giving you a loan or letting you open an account. It’s calculated to show how well (or badly) you pay your bills, how much debt you carry, and how all of that stacks up against other borrowers. The higher your score, the better. Here’s a general outline of what your score means:          

• Excellent: 767 – 999
• Good: 681 – 766
• Favourable: 614 – 680
• Average: 583 – 613
• Below average: 527 – 582
• Unfavourable: 487 – 526
• Poor: 0 – 486 (little to nothing is known about your credit behaviour)

You can check your credit score for free, once a year, by creating a profile on one of South Africa’s credit bureau sites.