Understanding your credit report in more detail
from MF ATTORNEYS INC
You can obtain one free credit report from each credit bureau every 12 months. We would like to explain to you the information kept on a credit report and how to check whether there is a blacklisting. We will deal with the main sections in a credit report and also explain the listings that can be found and how they can be dealt with.
1. Personal information
This section sets out full names, identity number, residential address, postal address and contact numbers. This section usually also sets out past addresses and past employers.
2. Credit score
This section sets out what the applicant’s personal score is based on the information held on the credit report at that moment in time. This score can range from 0-1000. A score between 1- 649 is considered below average. A score between 650 -749 is considered average and a score between 750-999 is good. It sometimes happens that there is no score on a report. This occurs either because the person is not credit active; alternatively they are under debt review or administration.
1. Personal information
This section sets out full names, identity number, residential address, postal address and contact numbers. This section usually also sets out past addresses and past employers.
2. Credit score
This section sets out what the applicant’s personal score is based on the information held on the credit report at that moment in time. This score can range from 0-1000. A score between 1- 649 is considered below average. A score between 650 -749 is considered average and a score between 750-999 is good. It sometimes happens that there is no score on a report. This occurs either because the person is not credit active; alternatively they are under debt review or administration.
3. Debt Summary/Credit account status
This section sets out the accounts on credit, the account numbers, the credit limits and the outstanding amount if any. This section also contains a 24 month payment history. What this means is that every credit report from any bureau will capture and keep the account history for a period of 24 months. This section will reflect whether a person has been paying their accounts, how many months they have been in arrears for / if the account has been written off as bad debt / handed over to the legal department or collection agency. This payment history is particularly important as this will indicate whether a person is over-indebted and is in need of debt counseling.
4. Public Domain Records
This is a particularly important section for ascertaining a blacklisting or type of adverse listing that may prevent you from getting credit. This section can be further subdivided as follows:
a. Adverse/default listing
This listing reflects accounts that have been unpaid for a few months and has since been handed over to a company’s in house legal department/collection agency or has been written off. This type of listing remains on a report for a period of two years and cannot be removed prior to this. It can however be updated to reflect that the account is paid in full if the outstanding amount is paid. This simple listing can prevent one from obtaining credit. Only recently have credit providers started lending to those who have a listing that has been updated to “paid in full” status.
b. Judgment
Where there is a large sum of money outstanding an institution will usually list a judgment against you to recover their money. Interesting to note is that judgments remain on a report for a period of 5 years unless the judgment is paid up and a rescission of judgment order is obtained from a court. You will always require an attorney to draft court documents and appear in court on your behalf to rescind the judgment. Having a judgment against you means it is highly unlikely to obtain credit.
c. Administration order
An administration order is granted when a person approaches a court to place them under administration so that they can pay an administrator / an attorney who then subdivides what you can pay to all your creditors. This option is only available where a debt does not exceed R50 000. This type of listing stays on your report for a period of 10 years. This can be removed by means of a rescission of the administration order. This type of listing will also prevent you from obtaining credit.
d. Sequestrations
This type of listing notifies credit providers that you have been declared insolvent and are either currently recovering or still insolvent. After a period of 10 years the insolvency status automatically changes to “rehabilitated insolvent.” The status of rehabilitated insolvent then stays on your report for a period 5 years. As an insolvent you will not be able to obtain credit.
e. Default alerts
This is a fairly minor listing and can be resolved by paying the account and notifying the credit bureau it has been paid. This type of listing is merely to notify the consumer that there is an account outstanding and will usually remain on a report for a period of 12 months unless paid up & removed.
f. Debt review status
This section will specify if a person is currently undergoing debt review which a process is created by the National Credit Act to enable people - over-indebted to get out of debt without the fear of having credit providers run after their assets. This status will only be removed when a person is no longer under debt review. Being under debt review does not necessarily mean you will not have access to credit. It may however still be difficult to obtain credit in very limited circumstances.
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