Metumo Shilongo, an associate in ENSafrica’s banking and finance department, writes:
If you have ever bought goods such as clothes, furniture or TV on credit, or taken a cash loan, then you most probably have a credit record.
This is because credit providers such as banks or furniture stores share both good and bad information with credit bureaus about the way in which you pay your debts.
Credit bureaus enter this information onto your credit record. The law dealing with the granting of credit, including loans, the National Credit Act 34 of 2005 (NCA), allows credit providers to check your credit record before they give you any credit.
A bad credit record will often mean that you may be blacklisted and will therefore not get any more credit, no matter where you apply. Or, if you do get credit, you end up being charged a lot more interest because you are seen as a risk.
Of course, the opposite is also true — a good credit record means you easily qualify for more credit. A bad credit history may come from not paying your debts on time, or simply not paying them at all, which results in the credit provider pursuing you by asking a court to force you to repay your debts or handing over your name to a debt collector.
Credit providers report all this information to a credit bureau. When you apply for credit, the credit provider you are applying to will go to the credit bureau to check before deciding whether to give you further credit.
At some point, however, once you pay off all your bad debts, the credit provider who reported you to the credit bureau as a risk must inform the credit bureau that you have paid your debt, and the credit bureau must update your credit record and remove the bad information.
How can you be sure that your credit record is up to date, and that your credit record does not contain negative information which should not appear on it?
The NCA says that you have the right to inspect any credit bureau to check your credit record. There are a number of credit bureaus in South Africa. You can call this number for assistance with checking your credit record: 0861 127 334.
If your record still has negative information about a debt which you no longer owe, you have the right to demand the bureau to remove that information from your record.
Once a year, you are entitled to ask any bureau for a report of your credit record free of charge. You can also ask for a report at any other time and for as many times as you wish at a fee of around R25 for a report.
If the credit bureau is refusing to let you see your credit record, or to update your credit record by removing information about debts which you no longer owe, you can report the matter to the National Credit Regulator by calling their call centre on 0860 627 627 or sending an e-mail to complaints@ncr.org.za
For free legal advice, visit ENSafrica at Sankopano or call them on 011 555 0980.
