Here at Head Office we all do some credit ‘spring cleaning’ right after the annual budget speech. Everybody requests a copy of his/ her credit record from TransUnion/ Experian and then scrutinizes the document in order to avoid any nasty surprises.
Did you know that potential creditors are obliged to check your credit record for any listings prior to approving your loan? A listing could then lead to the rejection of your application.
Ranked from least to most serious, there is a chance that you might spot one or more of the following listings on your credit record: payment profile information, adverse information, judgments and notices.
Payment Profile Information:
What is it? This listing changes every month, dependent on whether or not you paid your clothing/ other accounts. When you skip a payment, this gets listed on your credit record.
How do I remove it? There is nothing you can do to remove this type of listing.
Will it affect my loan application? It is definitely something your potential creditor will take into account when considering your application. However, in most cases you will be granted credit.
Adverse Information:
What is it? After skipping a few of the abovementioned payments or not paying on time, your creditor will notify the credit bureau and have you tagged as a ‘slow payer,’ ‘default,’ ‘write off,’ etc.
How do I remove it? The only way to remove this type of listing is to write to your creditor with reasons as to why your account was in arrears AND make payment to get your account up to date. Examples of reasons include hospitalization or retrenchment – please remember to attach proof of payment as well as proof of your reason. It is then up to your creditor to decide whether or not it will write to the bureau to remove the listing.
Will it affect my loan application? Although you will be granted credit in most cases, it may come at a higher cost to you.
Impact of the Removal of Adverse Consumer Information and Information Relating to Paid Up Judgements Regulations, 2014? Some data on your credit record (adverse information reflecting on 1 April 2014) was ordered to be removed. This does not mean that you no longer owe the outstanding amounts to your creditor. What is does mean is that future creditors will no longer see old adverse information data as available on 1 April 2014 when considering your credit application.
Judgements:
What is it? After skipping many payments, ignoring calls from your creditor, receiving letters of demand, summonses, your creditor will apply to court to confirm the amount owing plus interest, legal fees, etc.
Whereas a debt prescribes (expires) within three years since the date of your last payment or acknowledgement of the debt, a court order confirming a debt only prescribes after thirty years. This means your creditor has thirty years to enforce the debt.
For more information on judgements and emolument attachment orders (garnishees), please visit this link: http://www.legalherolearn.blogspot.co.za/2015/07/emolument-attachment-orders-in-south.html
How do I remove it? Previously you had to:
i. Pay the debt in full;
ii. Obtain a confirmation letter from the creditor;
iii. Apply to the same court for the rescission of the judgement. This was a costly exercise;
iv. Obtain a copy of the court order confirming the rescission;
v. Send the court order confirming the rescission to the credit bureau and request the judgement’s removal from your credit record.
Effective 1 June 2014, the creditor has an obligation to send confirmation of a paid up debt to the credit bureaus within 7 days. The bureaus (Transunion/ Experian) will then remove the listing within 7 days. You may also contact the bureau and submit the confirmation letter to arrange the removal if you wish to do so.
Will it affect my loan application? Yes. Having a judgment against your name will most likely lead to the rejection of your credit application.
Notices:
What is it? This is the most serious type and happens after you have been sequestrated or placed under administration.
How is it removed? You need to apply to court.
Will it affect my loan application? Yes. Creditors will not grant you credit and might even be held liable for acting recklessly should they do so.
We hope you found this post helpful. If you are a Legal Hero Policyholder, kindly contact our offices for assistance with your credit record.
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