Despite the country’s robust credit information industry, most South Africans do not know what their credit profile actually looks like.
It’s an all-too-common scene: you apply for an account at a retail store, and are taken aback when your application is declined on the grounds of bad credit. As far as you know, you’re the poster child for sound financial management – so what went wrong? Most likely, “as far as you know” is not far enough.
Sadly, even though South Africa has an incredibly strong credit information industry, many citizens are in the dark when it comes to what their credit profile actually looks like.
Earlier this month, local news site News24 cited African Bank executive Alfred Ramosedi as saying that many South Africans were “surprisingly unaware of the importance of a good credit profile”. What’s more, he said, many didn’t even know what a credit profile was – and in instances where they did know, they rarely checked their own personal credit profile.
And yet, the importance of managing your credit status – a task that begins with knowing your credit status – cannot be downplayed in today’s volatile economic climate. As Ramosedi rightly points out, many potential employers nowadays look at job applicants’ credit reports as a means of judging character and level of responsibility.
South Africa’s leading property website, Property24, lists bad credit records as the number one reason banks reject home loan applications, while car finance giant Carfin says the first thing you need to do if you’ve been declined for finance is “Find out why” – i.e. check your credit report. Step number two, says Carfin, is to improve your credit score.
The Credit Bureau Association points out that every single credit-active person in South Africa has a credit profile that shows how they manage their debts and accounts.
Fortunately, if you are a South African who wants to do the smart thing and familiarise yourself with your credit profile, you don’t have to climb any mountains to do so. On the contrary, our country’s credit information industry makes the process next to effortless for you. So much so, that there is really no excuse for not knowing your credit status.
On a scale of 0 to 8, South Africa ranks 7 on the World Bank’s Depth of Credit Information Index – a measure of the availability of credit information, where 8 is the highest level attainable by any country.
Additionally, according to the National Credit Act, every consumer has the right to one free credit report once in a 12-month period from the country’s main credit bureaus, namely TransUnion (formerly ITC), Experian, XDS and Compuscan.
A credit report is basically a comprehensive statement outlining your financial history and standing. It comprises information on your spending and borrowing patterns, how well you meet your financial obligations, general spending and payment trends and contact details. It also lists any judgment you may have against you, as well as any money owed to creditors.
SA’s number one data bureau, pbVerify, offers you this and more. Covering all bases – from consumer to corporation – pbVerify offers instant online access to easy-to-use web services, including one of the most advanced consumer trace and credit check searches, as well as reports on companies, closed corporations, consumers and properties in South Africa.*
This year, do yourself a great favour – get to know your credit status and start building a good credit profile today. Not only will you never again have to fret about being turned down when applying for credit, but you will also be able to take advantage of the better repayment terms that come with having a strong credit report.
* pbVerify sources its credit information from the country’s major credit bureaus, listed above, as well as from Windeed – a company of LexisNexis.
Company and director information is sourced from the Companies and Intellectual Property Commission (CIPC), South African Revenue Services (SARS) and ID verification data from the Department of Home Affairs and two major credit bureaus.
Property (Deed Search) data is sourced from the SA Deeds Office and brought to you via an advanced search function. Fraud indicators originate from the South African Police Services (SAPS), credit bureaus and the Department of Justice.
News24 – Ways to take control of credit
The Credit Bureau Association – http://www.cba.co.za/
The World Bank – Depth of Credit Information Index
Property24 – Why banks reject your home loan