Credit listing: your worst nightmare

Marilyn Williams - registered debt councilor

Imagine going to a bank to ask for finance only to find that you have been blacklisted by a credit bureau. Your dream of owning a car or a house is crushed.

What is a credit bureau?
A credit bureau supplies credit providers (shops, banks, money lenders etc.) with information on your credit history and how you manage your credit commitments. In other words, how much debt you have and how well you pay your ac- counts. In this way, the company that is opening a new account for you will have enough information about the way you pay the accounts you already have, so that they can make responsible decisions about granting you credit.

What is a judgment?
A judgment is a court order requested by your credit provider when you have not paid your debt. A legal process is followed before a judgment is issued. A summons is then issued to you. The law stipulates that the summons does not necessarily have to be issued to you in person but can be issued to your address (where you live or where you have agreed that notices may be served if you breach the contract). The summons tells you to appear in court and allows you to represent yourself. Where you fail to appear, judgment is issued in default. The judgment is held on the system of a credit bureau for five years and is then automatically removed.
Credit bureaus will not remove your judgment unless it has been rescinded in a court of law or if you qualify under the National Credit Act in terms of Amnesty as stipulated in Section 73, which regulates when the judgment data can be removed.

What is a default judgment listing?
A default means you have failed to pay as per your agreement. A default is held on the system at the credit bureau for two years.
What if you pay the outstanding balance? Will your listing be removed?
Paying a default account in full does not automatically qualify you for the removal of your listing. However, the credit grantor will be obliged to update the information on the credit bureau that you have paid the total outstanding amount.

What is an admin magistrate’s order?
This is a court order granted by a magistrates court at the request of you, the debtor, or a credit provider, provided that your debt does not exceed R50 000. The order examines your financial position and appoints an administrator to whom you make regular payments.
These payments are divided proportionately among your creditors as listed on your order.
An administration order remains on your credit record for a period of 10 years or fi years from the date of rehabilitation, whichever date comes sooner, and can be removed from the credit bureau prior to the 10-year period, as soon as the order has been rescinded.

Can you challenge the information on credit bureaus?
You must contact the credit bureau concerned to raise an objection or lodge a complaint.

1. The bureau has 20 business days in which to resolve the issue.
2. If the bureau is unable to resolve the issue, you should refer the matter to the Credit Information Ombudsman (CIO) at 0861 662 837.

Should the CIO be unable to find a resolution, the National Credit Regulator will intervene at the request of the CIO.
With regards to credit information, you have the right:

• To be informed that the credit provider in- tends to report negative information about you to a credit bureau before the credit provider actually reports you.
• To receive a copy of your credit record from a credit bureau when you request it. You can get one free record per year, but the credit bureau may charge you a fee for any further records.
• To challenge information kept by a credit bureau if you are unhappy with the information.
• For your information to be kept confidential and for your information to be used only for purposes allowed by the Act.

If you experience problems with servicing your debts take the following steps:

• Contact your credit provider to discuss your situation and negotiate an affordable repayment plan.
• If you cannot reach an agreement with your credit provider, you may contact a debt counsellor.

For more information call the National Credit Regulator on: 0860627627