Are you in control of your credit profile?

Have you ever applied for credit and been turned down because of a bad credit profile or because you were considered a high credit risk?

For many, this often comes as quite a shock.

African Bank group executive for sales and marketing, Alfred Ramosedi said many South Africans were surprisingly unaware of the importance of a good credit profile, many did not know what a credit profile even was, and even if they did, they seldom checked their own personal credit profile.

Ramosedi said a credit profile started with information from a credit bureau, which records all credit applications, credit agreements, payment history and payment patterns, as well as other consumer credit-related information. To receive good credit, it helps if you have existing credit.

Ramosedi explained that good credit profiles were gained when you borrowed money and paid the full amount back on time. Having a good credit profile enables you to borrow more money and to negotiate more favourable repayment terms.

“While adverse legal information is cleared as soon as the account is settled, the negative repayment history does remain for a couple of years,” he said.

Ramosedi provides the following useful guidelines on how to access and improve your credit profile:

• Look at the accuracy of your credit profile reports. You can do your own credit check free of charge every 12 months through credit bureaux such as TransUnion, Experian, Xpert Decision Systems and Compuscan
• If you have an unhealthy credit profile, investigate the reasons listed. Was it due to a foreclosure, or bankruptcy, or late and missed payments for a period of time?
• To improve your credit profile keep outstanding balances relatively low on credit cards and other credit accounts as high outstanding debt can affect your ability to repay credit
• It is not only a poor credit history that may affect your ability to get credit. A lack of positive credit information such as not having a history of paying on time, can cause an application to be declined or can result in an increased ‘cost of credit’ and will have a notable impact on the amount that you need to repay
• Avoid using credit for consumption spending.

Details: For a credit check contact TransUnion on 086 148 2482, Experian on 086 110 5665, Xpert Decision Systems on 0860 937 000 and Compuscan on 086 151 4131.