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Consumers do not have to apply for credit to check their credit report

This is an exercise performed by many consumers, to check whether they are in right standing with their credit. The purpose of the credit bureaux is to not only keep a record of your credit activity but to also provide you with a copy of your credit report, something that many consumers unfortunately are still not aware of.

During our consumer awareness campaigns with other financial Ombuds, government departments and regulatory bodies, the Credit Ombud came across several credit active consumers who did not know what a credit bureau is, what they do and how they can get a hold of them. Applying for credit to check their credit scores is quite a costly exercise and may even lead to further damage on your credit profile and credit score. Should they get declined upon application, then the real problem starts because they do not know how to get it fixed.

A consumer’s credit profile contains information relating to personal details, employment status and credit history. Should a consumer wish to apply for a loan or be extended credit for a furniture or a clothing account, the credit provider would request the consumer’s credit profile. This is one of the criteria set out in terms of the affordability requirements before a credit provider may extend credit to a consumer. As credit extension is about risk and costs, the best predicator of future behaviour is generally, past behaviour. Should a consumer’s credit record reflect adverse information, the consumer may be regarded as being a possible riskier debtor. For consumers applying for employment where the position requires honesty in dealing with cash or finances and the job descriptions of such positions are clearly outlined, the employer or recruitment agent may access the consumer’s credit profile.  Each time a consumer applies for credit, it will be recorded as an enquiry on their credit profile and the more enquiries reflect on your credit report, the less chances that you will be granted credit because it raises a red flag to your prospect credit providers.

The Credit Ombud would like to advise consumers on an easy and effective way to get a copy of their credit profile, where they will learn how easy it is to also dispute incorrect or outdated information on their credit profiles. Consumers are entitled to one free credit profile in any twelve-month period. Should they have already requested a report in that twelve-month period and require another report, the credit bureaux may charge them a nominal fee to obtain this. Upon receipt of their credit profile, we advise that the consumer go through the profile and where information thereon is incorrect or has not been updated, they may lodge a dispute with the different credit bureaux by contacting them back.

The National Credit Act, 2005 (NCA) requires that a consumer be informed before adverse information is reported to a credit bureaux. Adverse information belonging to a consumer shall not be submitted to the credit bureaux by credit providers and service providers without giving the consumer notice of its intention to submit adverse information concerning that consumer to the credit bureaux. The consumer must be given at least, 20 business days before the listing is placed on the credit bureaux.

Should a consumer wish to challenge adverse information submitted to the credit bureaux without having been notified by the credit provider or service provider, the consumer may lodge a dispute with the credit bureaux.

The Credit Ombud may proceed to investigate a complaint against a subscribing member upon confirmation of either of the following, ie the:

  1. 20 business days that the credit bureaux have to investigate the matter has expired and the matter remains unresolved and/or you remain dissatisfied with the outcome; or
  2. credit bureaux have reverted to you prior to the 20 business days with written feedback that they have credible information thus they cannot amend the information on your profile.

The types of disputes that the Credit Ombud may investigate may include:

  • Inaccurate or incorrect credit information;
  • Insufficient or incomplete credit information;
  • Out-dated credit information;
  • Notification or the lack thereof to consumers prior to listing adverse information as provided for in the NCA and more fully explained hereunder;
  • Listings in respect of prescribed debt, as defined hereunder;
  • Duplicate and/or double listings in respect of the same debt;
  • Service disputes – i.e. non-payment of an account or debt due to a dispute relating to service to which the account relates;
  • Listings in respect of claims or Court orders for damages and/or costs
  • Listings following incidents of identity theft and/or identity fraud.

For a consumer to receive a copy of their credit profile they may contact the credit bureaux by calling them, sending an email or through their website. If a consumer is not certain of the credit bureaux contact details, they may contact the office of the Credit Ombud and we will provide them with contact details to the major credit bureaux: TransUnion, Experian, XDS, TPN and VeriCred.