Understanding your Credit Report

Credit Scores

Please always consult your credit report for the correct ranges as it might change without notification.

Personal Information

This section includes personal information such as:

  • Addresses
  • Telephone number history
  • Employment history
  • Marital status

When you apply for credit, for example, a credit card, clothing store account, or vehicle finance, this information is sent to the various Credit Bureaus so it is important to ensure the information you provide is accurate and correct as it is used for identification and verification by credit providers.

It is also important to make sure this information is up to date and correct and that you check it periodically to ensure there is no suspicious activity or possible identity theft.

If you find that information is incorrect, you can log a dispute with the Credit Bureau you obtained your report from.

Payment Profile (Account History)

The following information is displayed in this section for each account that you have (the last 24 month`s data is displayed, but more history can be kept on record at the Credit Bureau):

  • The date the account was opened
  • Payment terms (e.g. 12 months, 72 months)
  • Account payment history
  • Credit Limit (for example, how much was borrowed or what your credit card limit is)
  • Monthly instalments (where applicable)

If an account is not paid or not paid on time, that will be reflected here. This negatively affects your credit score.

If you have a high amount of unsecured credit such as credit cards and personal loans vs secured credit such as a home loans or vehicle finance, it can also raise red flags.

If you pay your accounts on time, it will have a positive effect on your credit score.

Credit Listings

Items listed here can be one or more of the following:

  • Defaults
  • Judgements
  • Notices

One or more of these items will be listed here when you fail to repay your accounts within the terms specified for that account. See below for more information.

This negatively affects your credit score.

Defaults

If you do not pay one or more accounts, the credit provider of that account can load a default notice on your credit report.

A default notice can be grouped in one of the following:

Enforcement Default. It can be one of the following:
  • Debt written off
  • Debt handed over
  • Credit card revoked
  • Goods repossessed
Subjective Default. This attempts to classify the consumer, such as:
  • Slow repayments
  • Not contactable
  • Not paying or absconding

This negatively affects your credit score.

Judgements

If you do not pay your accounts and you do not respond to the credit provider’s attempts to make contact with you (usually via a summons), the credit provider can apply for a court judgement. This judgement is the court ordering you to repay your debt.

If the judgement is granted it stays on your credit record for 5 years or until paid in full. You might be required to appear in court and failure to appear in court can lead to the judgement being issued immediately.

Take note that a summons can be legally delivered to you, in person, or to your home address.

This negatively affects your credit score.

Notices

When you are insolvent or you cannot pay your debt, at all, a credit provider can apply for a notice order from the courts.

A notice can be one of the following:

  • Administration order (remains on your credit profile for 10 years)
  • Rehabilitation order (remains on your credit profile for 5 years)
  • Sequestration order (remains on your credit profile for 5 years)

An Administration Order involves the court assigning an administrator to you, and you make payments against your debt to this administrator. You can also apply for an Administrative Order yourself at the Magistrates Court provided your debt does not exceed R50 000.

A Rehabilitation Order after Sequestration restores your legal status to solvent. Rehabilitation can happen automatically (see below) or you as the consumer can apply for a Rehabilitation Order through the High Court.

With a Sequestration Order the court rules that your estate must be placed under trustee or curator control so that your assets can be auctioned off. You have to be declared insolvent and your estate must have enough value to pay off the minimum value set forth by the credit providers. The proceeds of your assets is distributed amongst the credit providers to which you still owe money, in order to pay off your debts. A Sequestration Order is automatically converted to a Rehabilitation Order after 10 years.

This negatively affects your credit score and can prevent credit being granted.

Notarial Bonds

This is a special type of security taken in relation to moveable property. It simply gives the credit provider preference if the individual is sequestrated (legal possession of assets).

Trace Alerts

If a credit provider is unable to successfully contact you, the credit provider can place a trace alert on you.

The trace alert will notify this credit provider should your contact information change or be updated, typically by another credit provider from whom you applied for credit.

Enquiries

This section contains a record of every time your credit profile (credit report) is accessed. You get soft and hard credit enquiries.

Soft Enquiries
This can be when you check your own credit report or, for example, your employer or potential employer checks your credit report as part of their recruitment process. Soft enquiries do not affect your credit score.

Hard Enquiries
This is made by credit providers such as clothing stores, vehicle finance providers, credit card providers etc. Your credit score can be negatively affected by several hard enquiries in a short time frame, as it can be an indicator of debt or a change in your financial status.

Make sure that you pay close attention to this section as it can be an indicator that someone else is trying to apply for credit using your details, and can be an indicator of identity theft.