Thursday, 4 September 2014

Your credit report - What does it mean to be blacklisted l credit report l blacklisted l credit repair l national credit act l debt relief l sequestration l sekwestrasie

Your credit report
September 3 2014 at 12:18pm
By Angelique Arde

Colin Daniel
This article was first published in the 2nd quarter 2014 edition of Personal Finance magazine.
Can I see my report?
Yes, you can, and you should check it regularly. You have a right in terms of the National Credit Act (NCA) to one free credit report a year from each of the credit bureaus in the country. The main consumer bureaus are Compuscan, Experian, TransUnion and XDS.
What is a credit bureau?
A credit bureau is a repository, or library, of data gleaned from an array of sources, primarily credit providers. The data provides a record of how credit-active consumers manage their credit. The bureaus compile reports on individual consumers and when you apply for credit, a credit provider goes to one or more of the bureaus to access your report, to determine whether or not to grant you credit.
How does a credit bureau work?
Credit bureaus collect data from a host of sources, not only credit providers. These include cellphone companies, retailers and debt collection agencies working on behalf of doctors and pharmacists. The bureaus then validate, "clean" and host the data, which is sold to subscribing credit providers. (The cleaning of data refers to checking for duplicate entries and ensuring that old information is removed from your record.) Credit bureaus compile reports on all credit-active consumers, together with a "credit score". Credit providers may buy your entire credit profile or part thereof. Every credit provider has its own credit scorecard, which is a set of rules used to evaluate data and determined largely by the credit provider's appetite for risk.
Why do I need to check my report?
Negative information that is inaccurate tarnishes your reputation, but you won't know this unless you check your report. Negative information that could be on your report includes:
* Defaults. If you are regularly late in paying your accounts, or if you haven't paid an account for three or four months, you may be reported as a "persistent defaulter". This is usually the first step before judgment is taken and this information stays on your record for two years.
* Judgments. Once a credit provider has obtained a judgment against you, it may be authorised by the court to have money deducted from your salary or to repossess your property (such as your furniture). This information stays on your record for five years.
* Administration orders. This is a legal process whereby an administrator is appointed to distribute your money on your behalf. This information stays on your record for 10 years or until the order has been rescinded.
* Sequestrations. This is a legal process whereby you are declared insolvent by court order and surrender your estate. The effect of a sequestration order is that your debts are written off, but a trustee is appointed to sell your assets and distribute the proceeds according to the Insolvency Act. If you have been sequestrated, this is noted on your credit record for 10 years, or until you have rehabilitated (and paid all your creditors). Once you have been rehabilitated, notice of this fact stays on your report for five years.
* Debt counselling. If you are in debt counselling, this will be noted on your credit record. Once you go into debt counselling, you are not eligible for more credit until all your debts are paid. (If your debts include a home loan, which usually carries a 20-year term, this means you will not qualify for more credit until your home loan is paid off.)
Need help?
If any of the information on your credit report is incorrect, you can log a dispute with the credit bureau. The bureau will investigate the dispute free of charge, and if the disputed information is found to be incorrect, it must update your profile.
Last year, the credit bureaus dealt with more than 100 000 complaints. Those they could not resolve – some 2 700 complaints – were referred to the office of the Credit Ombud, Manie van Schalkwyk.
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