Everything you need to know about credit bureaus

The word credit bureau makes many consumers feel uneasy, mainly because they do not really know how credit bureaus work. They are also very scared of ending up on the infamous “blacklist” which will bar them from getting credit and in some instances, even jobs or access to a private school for their children.

You usually only find out that you are blacklisted when you apply for credit and your application is denied. While the industry is wary about the word “blacklist”, mentioning the word could lead to consumers breaking out in a cold sweat.

The blacklist

The blacklist does not really exist. The term was previously used when credit bureaus only kept negative information about consumers, but this is no longer the case. Credit bureaus now also keep all your positive credit information that show you are good at paying your debts.

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National Credit Act

Section 43 of the National Credit Act stipulates that credit bureaus may collect and maintain information about your:

• Credit applications
• Credit agreements
• Payment history or payment patterns
• Credit information.

Credit providers use your credit information to check your payment history and see how you repaid and managed previous debt so that they can see how big the risk will be to lend you money and whether you will be able to pay it back. It is important to remember that the credit provider decides whether you get credit and not the credit bureau.

Your credit information

Section 70 of the Act describes consumer credit information as your credit history, which includes applications for credit, credit agreements you have concluded, your payment pattern, debt restructuring, steps to enforce payment and the circumstances where credit agreements are concluded.

Your financial history is also part of your credit information and includes:

• your past and current income,
• assets and debts,
• other information about your financial capabilities, prospects and obligations,
• training, employment, career and professional or business history,
• your identity, name, date of birth, identity number, marital state and family relationships,
• previous and present address, and
• other contact details.

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Credit providers and credit bureaus

Credit providers pay to submit credit information and use consumer credit information from credit bureaus.

According to the Act, credit bureaus must take reasonable steps to ensure consumer credit information they receive is correct, that they hold information for a prescribed period and promptly remove prescribed consumer credit information from its records, which may not be recorded in accordance with the regulations.

They must also provide information to credit providers when you apply for credit or ask for your credit record yourself and not give out incorrect information. Credit bureaus are also not allowed to draw a negative conclusion about your creditworthiness if it has no information about you.

Your rights about your credit information

Section 72 of the Credit Act stipulates that you have the right to be notified by a credit provider within 28 days before reporting to a credit bureau of any prescribed adverse information about you. You also have the right to ask for a copy and get a free copy of your credit record once a year so that you can check that all the information is correct.

You can also dispute the correctness of any information contained in your credit report, expect the credit bureau and provider to investigate and correct any errors and expect credit providers who give incorrect information to credit bureaus to reimburse you for the cost of correcting the information.

You also have the right to expect the credit bureau not to use the disputed information as part of your provided information, dispute the information by filling out and forwarding the credit bureau’s prescribed forms and complain to the Credit Ombud if you do not get feedback within 20 days.

Credit providers may also not expect you to get a report from a credit bureau when you apply for credit. The credit provider must do it themselves.

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Your information

Several types of adverse information remain on your credit record for different periods of time. Information about debts that you do not pay, late payments, that you disappeared without paying, pay slowly or cannot be contacted, remains on your credit record for a year, while information about debt collection by credit providers, such as taking legal action or writing off your debt, remains for two years.

When you have paid an overdue account in full, the debt is not immediately removed from the list, but it is indicated that you have paid.

Credit bureaus do not hold information about your race, ethnic origin, political opinions, creed, membership in trade unions, your health, sexual preferences, or criminal offenses.

How to ‘clean up’ your record

According to section 71 of the Act, if you have restructured your debt and paid it off, you can apply to a debt counsellor for a clearance certificate, which you submit to the credit bureau. The credit bureau must then remove it from its records.

This is where you can complain:

• The Office of the Credit Ombud: 0861 662837 or send email to ombud@creditombud.org.za.
• The National Credit Regulator: 0860 627 627 of 011 554 2600 of send email to complaints@ncr.org.za.