Om­bud can help you clear your name with credit bu­reaus if you are re­trenched

You may be one of the thou­sands of South Africans who has been black­listed by the credit bu­reaus be­cause you can­not meet your debt re­pay­ments af­ter hav­ing been re­trenched. How­ever, the Credit Om­bud may be able to help you re­store your cred­it­wor­thi­ness, wr

Weekend Argus (Saturday Edition) - - PERSONAL FINANCE -

If you have been black­listed by the credit bu­reaus due to cir­cum­stances be­yond your con­trol, such as re­trench­ment, the good news is that the Credit Om­bud may be able to help you to re­move the black­list­ing from your credit pro­file.

Nor­mally, a black­list­ing will re­main on your credit pro­file for up to five years, even if you sub­se­quently re­pay the out­stand­ing debt.

Manie van Schalk­wyk, the Credit Om­bud, says you must meet the fol­low­ing re­quire­ments:

The debt de­fault must be due to cir­cum­stances be­yond your con­trol, such as re­trench­ment;

You must pro­vide the om­bud with proof that you no­ti­fied the credit provider of your re­trench­ment timeously; and

You must ver­ify that you have since paid the debt in full.

Van Schalk­wyk says he will then look at your pay­ment be­hav­iour be­fore you were re­trenched. He will also check if you made al­ter­na­tive pay­ment ar­range­ments with your credit providers and if you hon­oured those ar­range­ments.

Be­ing black­listed by a credit bureau means that you can­not get more credit, with the re­sult that you can­not buy a car on hire pur­chase or take out a home loan.

Many con­sumers who have lost their jobs due to the re­ces­sion are likely to find that they have been black­listed by credit bu­reaus, be­cause they can no longer hon­our their debts, Van Schalk­wyk says.

Fig­ures re­leased in May by Statis­tics South Africa show that 25 per­cent of the work­ing pop­u­la­tion (those deemed to be eco­nom­i­cally ac­tive) were un­em­ployed at the time. Ac­cord­ing to Ad­corp, the largest re­cruit­ment com­pany in South Africa, more than 5.5 mil­lion adults are out of work.

The Ad­corp Em­ploy­ment in­dex fell sharply in May this year, com­pared with the same pe­riod last year. The in­dex shows that 75 per­cent of more than a mil­lion jobs lost dur­ing the 2009/10 re­ces­sion were lost by peo­ple un­der the age of 34.

The high level of un­em­ploy­ment means that a large num­ber of con­sumers who pre­vi­ously were able to meet their fi­nan­cial com­mit­ments are no longer able to do so.

Your cred­i­tors (the busi­nesses that you owe money) file in­for­ma­tion that af­fects your credit pro­file (whether you pay on time or are a slow payer, or whether you have de­faulted on re­pay­ments) with the fol­low­ing credit bu­reaus: Ex­pe­rian SA, Com­pus­can In­for­ma­tion Tech­nolo­gies, Con­sumer Pro­file Bureau, Kred­itIn­for m, Lex­isNexis Risk Man­age­ment, Mi­cro Len­ders Credit Bureau, Tran­sunion ITC and Xpert De­ci­sions Sys­tems (XDS).

Other cred­i­tors use the in­for­ma­tion filed at the credit bu­reaus to give you a credit score when they as­sess whether or not you qual­ify for a loan or credit.

But it is not only neg­a­tive in­for­ma­tion that is recorded on your credit pro­file. Your credit pro­file will also re­flect, for ex­am­ple, if you al­ways pay your re­pay­ments on time and if you pay your debts be­fore they are due.

The num­ber of ad­verse credit list­ings in­creased from 26.5 per­cent of all credit list­ings in De­cem­ber 2008 to 27.9 per­cent in De­cem­ber last year, Vi­vian Pather, the man­ag­ing di­rec­tor of XDS, says.

Al­though the Na­tional Credit Act (NCA) en­ti­tles you to ac­cess one free copy of your credit pro­file each year, Pather says only one per­cent of credit-ac­tive con­sumers re­quested free re­ports last year.

“The credit re­ports are viewed as con­fi­den­tial, and to pre­vent this in­for­ma­tion fall­ing into the wrong hands, the credit bu­reaus will ask you to con­fir m your per­sonal de­tails,” he says.

With XDS, you can ac­cess your credit re­port by send­ing an SMS that con­tains the word “free” to 37996. You will be di­rected to XDS’s mo­bile web­site, where you have to reg­is­ter by en­ter­ing your full name, iden­tity num­ber and cell­phone num­ber and choos­ing a pass­word. You will be asked to ver­ify cer­tain de­tails (these vary and could in­clude your ad­dress and de­tails of one or more of your ac­counts) as part of an au­then­ti­ca­tion process be­fore you can ac­cess your credit re­port on your cell­phone screen.

Al­though the ser­vice is quick and easy (Per­sonal Fi­nance tried it), the SMS will cost you R1.50.

XDS says the charge of R1.50 is to cover the cost of pro­vid­ing the ser­vice and the com­pany does not earn any rev­enue from this ser­vice.

Credit bu­reaus re­quire that you send them copies of your iden­tity doc­u­ment and proof of ad­dress so they can ver­ify that they do not re­lease your con­fi­den­tial fi­nan­cial in­for­ma­tion to unau­tho­rised peo­ple.

In ter ms of the NCA, credit bu­reaus must safe­guard both the in­for­ma­tion they store about you and the doc­u­ments they request from you, such as copies of your iden­tity doc­u­ment.

By the time of go­ing to press, Tran­sunion ITC was not able to re­spond to ques­tions from Per­sonal Fi­nance about how you can rec­tify in­cor­rect in­for ma­tion on your credit pro­file, be­cause the com­pany’s head­quar­ters is not in South Africa.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.