- Credit Basics
- Credit Listings
- Credit Score
- Managing Debt
Credit is the option extended to you by a registered credit provider to enable you to purchase their products or services in a ‘buy now, but pay over a certain timeframe agreement. It means that you are given more time to pay your debt, while being able to enjoy the benefit of the purchase immediately.
A credit provider can be a store, bank and/or any entity that is registered to provide credit that gives credit to consumers.
Your credit report is a record of your credit activity and credit history. It includes the names of companies that have extended you credit, as well as the credit limits and loan amounts. Your payment history is also part of this record. If you have default accounts, judgments and court orders, these can also be found on your credit report.
Every month, credit providers submit updates on your credit profile to TransUnion and other bureaus at various times, a factor that might contribute to slight differences in your reports, and therefore your credit scores, at any given time. Since credit providers do not necessarily report to all credit bureaus, the information on your credit report may vary.
Yes, your credit report also serves as an archive for certain personal information, which includes but may not be limited to: your current and former address (es), name, surname and employers.
When you apply for credit (for example a home or car loan, even a new credit card) credit providers need a way to gauge whether or not you are able to honor your repayment commitments as set out in the terms and conditions of your credit agreement entered into with them. Your credit report includes a record of your financial reliability. Under the National Credit Act, every credit active South African is entitled to one FREE credit report every 12 months.
Any credit provider/s to whom you have given permission on the credit application form when applying for credit may view your credit report Your credit report, along with other decisioning tools that they use to process credit applications, helps credit providers decide whether or not to grant credit to you.
Only the credit provider with whom you have applied for credit can tell you why your application was declined. The credit provider must on request by you provide you, in writing, with the reason why your application was unsuccessful.
You are advised that each credit provider sets their own credit assessment criteria to determine whether or not to afford you with credit and these will differ from credit provider to credit provider and from product to product. The criteria may possibly include amongst other things: a measurement of your affordability by comparing your income and expenses, information supplied by the applicant (you) regarding employment details, number of years at current residence, if the applicant (you) owns a home, number of dependents, etc.
TransUnion does not make the decision to grant you or deny you credit. Different credit providers have different criteria, rules and credit-granting policies that they use to decide if credit should be granted to your or not, and to determine how much risk they want to accept.
Positive listings on your credit profile reflect good payment behavior, such as when you have paid your accounts on time and in full every month. Negative listings may include but are not be limited to judgments, defaults, administration, debt review, sequestration. If you suspect that you might have any of the negative listings on your credit record you can obtain that information from a credit bureau like TransUnion.
A judgment is granted by the court against a person who has not paid their debts to a credit provider. It is public information and remains on your credit report for five (5) years or until the judgment is rescinded by a court or paid in full.
A consumer may apply to the court to place themselves under sequestration, or a creditor may apply to get a consumer sequestrated. This will reflect on the consumer’s credit profile as an insolvent status. The insolvent is automatically rehabilitated within 10 years from the date of their sequestration.
If you have been sequestrated or liquidated and have paid off all your debt, the court can remove the sequestration or liquidation order.The listing will automatically be removed after 10 years and once rehabilitated, a rehabilitation notice will reflect for a period of five (5) years.
TransUnion’s creates its own credit score which is a 3-digit number. It represents your overall credit behavior and includes score ranges that will help you to understand your score. Each credit bureau creates their own credit score therefore it is important to note that it will differ.
Your TransUnion Credit Score is calculated based on the latest information contained in a credit report at the time the score is requested, and may fluctuate based on your credit behavior.
What number band indicates if my TransUnion Credit Score is good or bad?
- Excellent: 767 – 999
- Good: 681 – 766
- Favorable: 614 – 680
- Average: 583 - 613
- Below average: 527 – 582
- Unfavorable: 487 – 526
- Poor: 0 – 486
The National Credit Act (NCA) states that a credit provider may determine for itself any scoring or other evaluative mechanism or model used to assess and determine credit allocation/s. This means that the TransUnion Credit Score may not be the same score that credit providers will use to decide if you qualify for credit or a loan.
A credit risk score used by credit providers will include not only the credit information held by a credit bureau, but elements requested when an affordability assessment is done, for example your income and expenses, demographic information, current and past relationship with the credit provider, collateral etc.
- Too much debt: Having too much available credit can sometimes harm your credit score. Credit providers may feel that you have the ability to spend more than you could potentially pay back. Consider closing a few accounts or asking to have your credit limits reduced.
- Your account balances are too high: High levels of debt can signal to potential credit providers that you are spending more than you can afford. It is a good idea to use your credit cards regularly but remember to keep your balances below 35 percent of your available credit limit.
- Late payments: Late payments will drop your score. In other words a 90 days late payment is more damaging than 30 days late. Always pay at least the minimum amount on your credit account each month.
- Too many new accounts: Looking for new credit can equate with higher risk if the enquiries are done across many different industries in a short period of time. Opening several credit accounts in a short space of time affects your TransUnion score. The impact from applying for credit will vary from person to person based on their unique credit histories.
- Court records such as judgments on your credit report are items of public record that indicate that you did not honor a particular debt obligation. In some cases, such as judgments, it also indicates that the credit provider took legal action against you in an attempt to collect the debt. An item in this category will significantly lower your score. Payment of these types of items will not immediately undo the damage to your credit score.
Debt management is an important skill for nearly everyone. Knowing your options for better management of your debt will help you to stay in control of your debt. You may not, for example, be managing your debt wisely if you are unable to pay your credit card and store card balances every month. It is important to register with a credit bureau and access your credit report so that it gives you a view of your how you are managing payment of your debt.
Do not ignore the problem and hope it goes away. The good thing about a negative credit report is that it can be fixed. Find out what is considered bad and good for your credit, and how to recover from your credit mistakes.
Access your credit report and review it carefully. Make a list of your debts and priorities them from most important to the least important. Cut out all unnecessary expenses and use the extra cash to pay off your debts one by one. Negotiate or consolidate your debt by talking to your credit provider/s about a rate reduction.
Never ignore letters of demands or summonses to appear in court for non-payment. Phone the credit provider and try to adapt your repayment plan. Stick to your plan and be disciplined. Do not spend what you can’t afford to repay and look at your credit report monthly to track your improvement.
A debt counsellor helps over-indebted consumers to restructure their debt. If you are unable to service the monthly repayments on your credit agreements, you can request the assistance of a debt counsellor to restructure your monthly repayments with your credit providers. A debt counsellor can also assist you with basic financial planning skills, such as drawing up a budget. It is recommended that you only request assistance from a debt counsellor who is registered with the National Credit Regulator (NCR).
A dispute is a challenge to the correctness of credit information appearing on your credit report. If this information does not appear to be factually correct in all details, you can log a dispute with TransUnion. Please bear in mind that if the information appearing on your credit report is factually correct in all details, but needs to be updated in light of a subsequent event which is not reflected, this is not a challenge based on the accuracy of the information, it is considered an update and will be dealt with as a query.
TransUnion considers the following to be dispute categories
Factually incorrect: The information on your credit record is factually incorrect (for example, the listing on your credit report does not belong to you). This may include any court record, default, payment profile line, or trace alert. Another example is if you did not apply for debt counseling, but your credit report is updated with a debt counseling indicator.
Fraud: Someone applied for credit fraudulently in your name and you are now listed for the debt. To assist you with this type of dispute we require you to provide us with a completed dispute form, an affidavit and Financial Intelligence Centre Act ("FICA") documentation.
Outdated information: The information on your profile is outdated, which means that the data retention period that bureaus follow in retaining certain information on your credit report has expired, but the data still appears on your profile.
A query relates to the content of information on your credit report and is not a challenge to the accuracy of information on your credit report. An example would be your name, address, employer and ID number. To update your personal information we require you to provide us with the relevant, verified information to substantiate your query.
A query relates to the content of information on your credit report and is not a challenge to the accuracy of information on your credit report. An example would be your name, address, employer and ID number). To update your personal information we require you to provide us with the relevant, verified information to substantiate your query.
Call us on 0861 482 482 to request that a dispute form be forwarded to you to complete. You will be required to complete and return the dispute form together with the required FICA documents.
Your FICA documentation includes a copy of your ID book and a copy of any one of the following documents for verification (all such letters should not be more than months old): electricity or store account statement; lease agreement; letter from a tribal chief or civic organisation; letter from your parents if you are living with your parents; letter from your employee.
Submit your dispute form (as well as supporting documentation to substantiate your dispute or query) together with a verified copy of your ID and proof of residence. On receipt of the dispute form and supporting documentation, TransUnion will provide you with a reference number. If your query is within our jurisdiction, we will launch an investigation.
TransUnion will initiate an investigation as soon as all of your documentation is received to substantiate your dispute or query.
Investigations are typically concluded within 20 business days.
