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Check your credit status

26 June 2007 Gareth Stokes

We were paging through a consumer advice publication distributed at our local Absa branch, when an article on credit rating agencies caught our attention. These agencies (or credit bureaus as they are also called) play an important role in the South African credit environment.

Almost every credit agreement you enter into will generate a query to one of the major credit bureaus operating in the country. At present there are two bureaus, TransUnion ITC and Experian.

Regulation requires the credit bureaus to forward detailed and audited records to the National Credit Regulator (NCR). In a recent statement, Peter Setou, the senior education and strategy manager at the NCR, revealed that they already held 25 million individual credit records. Of these, as many as 20% (five million) include default judgement entries.

How do you go about finding out if you are one of the five million?

Checking your credit profile is easy

In terms of the National Credit Act, which recently came into full effect, every consumer is entitled to one free credit report per annum. The process is extremely simple and requires that you provide some basic information to confirm your identity, before your report is emailed, faxed or posted to you.

The report contains a range of personal information, including your identity number, contact telephone numbers and email addresses. It also maintains a record of your employment details and work contact numbers each time you made a credit application.

The section you will be interested in covers judgements, notices and notarial bonds. According to TransUnion ITC, "a judgement is granted when a court has ordered the individual to make payment on the debt or outstanding account." A notice is "a legal action taken against you after you fail to pay a debt or outstanding account. Notices include administration orders, provisional sequestrations, sequestrations and rehabilitation orders." And finally, a notarial bond is "a bond over movable property registered by the Registrar of Deeds. Creditors use notarial bonds to secure debts and record of such a bond is not considered negative information."

Records reveal some 'interesting' results

Unable to resist the temptation we logged on to the TransUnion ITC website to obtain a copy of our credit record, free of charge.

The initial joy at receiving a clean bill of credit health soon disappeared when we noticed how inaccurate the personal details included with this report were. Our credit record included three different references to the same job, each with a different telephone number. We might take responsibility for this discrepancy, but we soon noticed that our postal address was also incorrect, possibly gleaned in error from an unrelated credit application completed for a close corporation. 

And to make matters worse, the report included a home telephone number which had never been seen before! These reports are based on information supplied on various credit application forms and there is plenty of chance for human error in the capturing and sharing of this data.

The Credit Act will set you free

The great thing about the National Credit Act is you will find it much easier to clean up your financial records. Unless you are a habitual defaulter, you should be able to get most of your minor slips removed from the permanent record.

The Act requires the credit agency to remove from your credit record:

* Any negative details on debts of less than R500
* Any information on accounts that have been dormant for more than two years
* Any information on your record about civil court judgements of less then R500
* Any information about civil court judgements of less than R5,000 if more than 18 months old
* And, any information on civil judgements of less than R50,000 provided the amount has been repaid by September 2006

You owe it to yourself to check that you have a clean bill of credit health. Make use of your annual opportunity to approach one of the credit bureaus and obtain your free credit report. You can reach TransUnion ITC (www.mycredit.co.za) on 0861 482 482 or Experian (www.experian.co.za) on 0861 105 665. Please bear in mind that the free service is being implemented on a month by month basis according to your month of birth. Those born in July and August will have to wait till July and August to get their reports.

Once you obtain a copy of your credit report, take the time to check that the detail included on the report is accurate. If you are unhappy with the information, or spot basic errors, get hold of the credit agency in question and request that they remedy the situation.

Editor's thoughts:
Some of our recent dealings with banks, and now the credit record agencies have left us in awe at the extent of their administrative in-efficiencies. Take some time to check your credit record, and let us know if you discovered what you expected to. Send your comments to [email protected]

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