Bureau issues ‘need urgent attention’

There are issues that need to be addressed immediately about credit bureau information – and you don’t need to call an amnesty to do so, Magauta Mphahlele, chief executive of the National Debt Mediation Association (NDMA), says. These issues include:

The use of a person’s credit bureau status to determine employment suitability. “This has become a practice used indiscriminately across industries, and [it] prejudices those consumers who have fallen on hard times and need to get back on their feet,” Mphahlele says. The underlying assumption is that consumers who get into financial trouble are dishonest, which is not always true, she says. “The National Credit Act (NCA) meant for this criterion to be applied only in specific circumstances.”

Problems with the removal of information that has reached the limits of the retention periods outlined in the NCA. For example, if you have a judgment against you, this stays on your record for five years. Mphahlele says that sometimes the information is not removed and this prejudices consumers. Although judgment information stays on your credit record for five years, it can be removed sooner if you can get the judgment rescinded by a court or abandoned by credit providers in terms of the Magistrates’ Courts Act. This process is, however, costly for the consumer.

Loading information onto a credit profile that is not supposed to be loaded, such as prescribed debts and multiple listings of the same debt.

The low take-up by consumers of their annual free report from each of the credit bureaus.

Debt review status and other information relating to loans not being loaded on time or at all, allowing credit access to consumers who should not be accessing credit. This leads to overindebtedness and, later, a negative credit bureau status, Mphahlele says.

Education about credit bureau information – for example, consumers need to be taught how to read the reports and made aware of the options available to rehabilitate themselves.

Mphahlele says consumers seek help from the NDMA mainly for two reasons: a change in circumstances and unplanned expenses. A change in circumstances may include maternity leave; the death of a breadwinner; the loss of a job; divorce or a broken relationship, where one partner is left at a financial disadvantage; and retirement (a social old-age grant is insufficient both to cover living expenses and service debt). Unplanned expenses include medical costs; a death in the family and the need to pay towards a funeral; the birth of a child; and increases in electricity and transport costs, which affect the cost of all basic needs.