No such thing as ‘blacklisting’
The term is a misnomer, says credit ombud.
Hanna Barry | 18 June 2015 00:45
http://www.moneyweb.co.za/mymoney/moneyweb-personal-finance/no-thing-blacklisting/
JOHANNESBURG – The term ‘blacklisted’ is a misnomer. No ‘blacklist’ exists and there is no such thing as a blacklisting, according to deputy credit ombud, Reana Steyn.
“People started talking about being blacklisted many years ago when they realised that they were turned down for credit because of negative information listed with a credit bureau,” Steyn explains.
That the term ‘blacklisted’ has since become a common feature of modern-day credit parlance is unfortunate because it suggests that all information listed with credit bureaux is negative.
This is not the case. When you open an account or take on credit of any kind, your repayment behaviour – whether positive or negative – is recorded by credit bureaux.
Where a credit provider identifies sufficiently poor repayment behaviour on your credit report it might refuse to grant you credit and tell you that this is because you are “blacklisted”, but this is misleading.
All the credit provider has done is assess your payment information on your credit report. This means that skipping a payment one month and then doubling up the following month is unwise. “It’s going to show on your record that from time to time, you have skipped payments,” says Salem Dyafta of credit bureau TransUnion.
On the other hand, if you pay all of your accounts on time each month you’ll find that you have a very positive credit report and won’t struggle to access further credit.
Either way, credit bureaus simply record repayment behaviour (good or bad) and reflect any default listings or judgements against errant consumers. A credit provider might list you as having defaulted or hand you over to lawyers if you have been in arrears for several months. Before it does so, it must send you a letter to inform you of this, although it is your responsibility to ensure your contact details are up to date.
Know your credit score
“We want to encourage people to access their credit reports regularly and improve their credit scores,” Steyn emphasises.
Under the National Credit Act (NCA), you are entitled to one free credit report per year and have the right to challenge information on your credit report if you believe it to be incorrect.
Identity theft and human error (often on the part of credit providers) are two of the major causes of incorrect consumer credit information being held by credit bureaux.
According to data from the National Credit Regulator (NCR), of the 22 822 disputes lodged in respect of the accuracy of consumer credit records for the quarter ended December 2014, 17 397 disputes were resolved in favour of complainants.
This does not necessarily mean that all 17 400 odd credit records were inaccurate. “Some of the disputes may have been resolved in favour of consumers because the credit provider didn’t respond to the complaint within 20 business days, as is required by the Act,” notes Steyn.
Thami Tembe, a director at Tembe Kheswa Nxumalo Incorporated in Durban and member of the Law Society of South Africa, says it is the consumer’s responsibility, upon discovering that their credit information is incorrect, to furnish the credit bureau with information to prove otherwise.
The NCA stipulates that where you have been refused credit based on an adverse credit report, the credit provider must provide you with the contact details of that credit bureau. The Act also obliges a credit bureau to “take reasonable steps to verify the accuracy of any consumer credit information reported to it”.
Steyn highlights that where your report reflects poor repayment behaviour, you can improve your credit record if you pay everything on time for a year or two. “Whatever the situation is, you can over time change it into only positive information,” she says.
Despite the fact that all South African citizens can access one free credit report per year, data from the NCR reveals that for the quarter to December 2014 only about 146 000 credit reports were issued. That amounts to roughly 584 000 reports issued a year in a country with nearly 23 million credit active consumers.
What about Credit Information Amnesty?
Credit Information Amnesty, introduced last year, involved a once-off removal of default listings at April 1 2014. These could be reinstated after this date. Amnesty also ruled that judgement listings must be removed on an ongoing basis once a consumer has settled the capital amount. In terms of the National Credit Amendment Act, once outstanding debt has been repaid, credit providers must submit information of the settlement to credit bureaux within seven business days.
What Credit Information Amnesty did not however do is remove your payment information. In other words, credit providers can still view your monthly payment behaviour and decide on that basis whether to grant you credit or not.
To access your free credit report, visit any of the following websites: www.transunion.co.za; www.experian.co.za; www.compuscan.co.za; www.xds.co.za.
