What’s On A Consumers Credit Report in South Africa?

Consumer Credit Report in South Africa

Consumers credit reports are used to track a persons credit history, what many people don’t realist is that their credit score is something that they can have a direct impact on improving. The score, known within the industry as the FICO score, was developed by a company called Fair Isaac’s and Co. to help evaluate the likelihood that an individual would repay their debts. FICO scores range from a low score of 300 which is classed as high risk to 850 which is classed as lowest risk. This score is tweaked by the industry to fit particular companies risk appetite but make no mistake, your credit score is your passport to obtaining credit. If you have a low risk score then you will find getting a home loan easier than say an individual with a higher risk score.
The score of an individual is determined using a mathematical model and basically the data on an applicants credit report is taken into consideration. The factors most looked at in order to determine a consumers credit report score is as follows.
  • previous credit performance
  • current levels of indebtedness
  • the duration of your credit agreements
  • the different types of credit you have
  • your patterns in taking on new credit

What’s on the Report and Why Should I Care?

Personal Data
The first section contains all your personal data, such as current and previous addresses, South African Identity number and employment history. This is prime data for criminals that steal identities, so be extra careful that you take steps to protect this information and you do not simply leave it lying around for strangers to find.

Credit History
The next section of your consumers credit report provides a summary of the consumers credit history. It includes the total number of accounts (both open and closed) held by the applicant, the nature of accounts (bond, installment, revolving credit), the number of credit inquiries over the last 12 months by credit providers, the number of accounts that are past due as well as those in good standing.

When applying for credit, companies will review your consumer credit report prior to approving a loan or extending credit, These credit providers will often take a risk adverse approach and assume that all your existing credit facilities such as bond and credit card are maxed out with the maximum monthly repayments and then factor in your other variable expenses to come to a total available amount of money you will have to service the loan or credit card. Therefore if you have lots of credit accounts and credit cards, even if there is no money owed on them, this can negatively impact your profile when applying for credit as the credit provider will factor in your credit access and monthly repayments on this access to determine your credit worthiness.

Account Details
The next section provides detailed account information. It will includes the name, account type, account number, date opened, balance and status of every account on the applicant’s record. A breakdown of each account provides payment history, date of last activity and contact information for the credit issuer. The section also includes a summary of past-due accounts and accounts with a negative credit history.

If you find something on your report that you do not agree with, you have the right to notify any of the credit bureaus and dispute the issue. Supporting documents are required as well a proof of identity. But they system is available to you as a consumer and if your issue is legitimate the matters will be resolved and the adverse information removed from your consumer credit report.

Next you will find a  section which addresses inquiries into the applicant’s credit history. Inquiries are typically classified by the industry as “hard” or “soft.” Hard inquiries are “created when you consent and authorized a company to request a copy of your credit report for credit vetting purposes.” The number of inquiries over a 12-month period is tracked and taken into account when your credit score is calculated. An excessive number of hard inquiries have a negative impact on your score.

Soft inquiries are created by your existing creditors who are simply checking on the status of your profile. These inquiries do not impact your credit score.Collections
The fifth section shows clearly details of any accounts that have been turned over to a credit agency. If for any reason you have failed to keep up with scheduled credit payments on any of your accounts and a collection order is been granted against your consumer credit profile, it will be reflected here. This also goes for judgments and any other blacklisted behavior. Any other these issues would seriously affect your credit score and make it very hard to qualify for credit.How That Information Impacts Your Score
Various factors such as payment history, the length of time an individual has had credit and the individual’s employment history all play a role in determining your credit score. So, even though have a great job, you have little or no debt, you pay all your bills on time if is unlikely you would obtain a full credit score.Check Your Credit
These days your consumer credit report is easy to get hold of. If you are contemplating a large credit purchase, such as a second home or a nice new car, running a credit check on yourself is a good idea. If you run the check at least 90 days before your purchase, you should have plenty of time to address any discrepancies that appear on the report and the better your score the better the terms you will be offered. So taking note of your credit health may actually save you a lot of money in interest payment.
I-Check Data Solutions can offer you a comprehensive credit health report for the tiny sum of R 20 ex vat. It will tell you everything you need to know to make informed decision about your credit health and how to improve your score. If you would like to know more about this product, please do not hesitate to contact us today!
Consumers Credit Report