Experts Urge Young South Africans To Build Credit Early To Improve Future Finance Access

Yet despite people under 24 making up 43% of the population, they account for just 0.5% of the credit market, while 72% of Gen Z South Africans have no credit history — a factor that can limit future access to finance.

"A good credit record is critical in South Africa because it can have a direct impact on future access to finance for major life goals,” says René Moonsamy, director at the National Debt Counsellors.

“Getting a headstart on establishing a credit history early, and understanding how to successfully manage it, can improve your chances of accessing substantial credit later in life. Your credit profile is like your financial track record, and because the length of your history is a factor lenders consider, starting early gives you a real advantage.”

Understanding where things can go wrong is just as important as knowing what to do right. Several common mistakes trip up young South Africans when they first enter the credit system — opening multiple accounts in a short space of time, maxing out a first credit card, or assuming that avoiding debt entirely is the safest strategy. Each of these can quietly set a credit journey back before it has even begun.

"Most credit mistakes made by young South Africans are not failures of discipline but rather failures of information and knowledge. And that is something we can fix,” says Moonsamy.

Central to that knowledge is the need for young South Africans to understand that not all debt is created equal. Good debt is borrowing that works in your favour over time. It is credit used purposefully to fund things like education that builds earning potential, a home that grows in value, or a business that generates income.

Bad debt, on the other hand, is borrowing that costs more than it gives back, typically for non-essential purchases or a lifestyle you cannot sustain. The goal is not to avoid credit altogether, but to approach it with intention and understanding.

Moonsamy shares five practical steps young South Africans can take today to start building a healthy credit foundation:

• Paying accounts on time is the single most important habit to build. Setting up debit orders or payment reminders makes on-time payments automatic and ensures consistency, which is what builds trust with lenders over time.
• For those starting from scratch, beginning small and building intentionally is the right approach. Opening a low-limit credit card or a small retail account — and using it responsibly, paying it off in full each month — is how a track record gets established without taking on unnecessary risk.
• Keeping credit utilisation low is equally important. As a general rule, staying below 30% of the available limit signals financial discipline to lenders.
• Avoiding unnecessary debt means asking honest questions before borrowing. Is this a need or a want? Are the monthly repayments genuinely affordable? Borrowing for depreciating assets or impulse purchases can quickly compound into unmanageable debt.
• Regularly monitoring a credit report is good financial hygiene for everyone — not just those in financial difficulty. By checking their profile regularly through free tools like Finance 365, young South Africans can track how their financial behaviour is influencing their profile over time and identify any errors or fraudulent activity before they cause lasting damage. For many young people, that first credit check is also the first moment they truly understand what lenders can see. That knowledge alone can be a powerful motivator.

The conversation around youth financial literacy does not only belong to young people themselves. Parents and guardians play a significant role in how the next generation enters the financial system, whether by helping a young adult open their first account, co-signing an agreement, or simply having honest conversations about money at home.

“Financial independence is not about earning a lot. It is about making informed decisions with what you have,” adds Moonsamy. “Youth Month is a reminder that empowerment starts with education. The financial choices young South Africans make now, however small they may seem, are laying the foundation for the life they want to build. We want to make sure they have the knowledge to make those choices well.”