“Of all our cases last year, 70% of consumers contacted the Credit Ombud office for assistance after their credit application has been rejected due to a negative listing on their credit profile,” says Credit Ombud, Manie van Schalkwyk.
“To avoid disappointment, it’s imperative for consumers to ensure the credit information held with credit bureaus is correct, prior to applying for credit.”
Most credit providers use credit bureau information when undertaking credit assessments and granting finance to credit applicants, the credit profiles are also used to determine interest rates and the terms of business. According to National Credit Regulator (NCR) statistics, a total of 199,26 million enquiries were made on consumer credit records for the quarter ended March 2011, an increase of 12,8% on the previous quarter. This was an increase of nearly 60% compared to the previous year.
“These statistics show more people are applying for credit compared to a year ago,” says van Schalkwyk. “But according to the NCR, there was a marginal increase in the rejection rate of credit applications to nearly half of all applications – from 43.21% to 43.25% for the quarter ended March 2011.”
Do it yourself
“Most consumers leave it up to the credit provider to check their credit history with a credit bureau when applying for credit,” he says.
Van Schalkwyk explains that in order to ensure their credit records are up-to-date, consumers are entitled to a free copy of their credit bureau record from any one of the registered credit bureaux annually.
“In addition to the free report, consumers’ credit reports can be obtained from credit bureaux for a minimum R20 per copy of the report,” he says.
Van Schalkwyk says consumers who feel that they are listed unfairly or that there are incorrect information listed at a credit bureau and have unsuccessfully tried to rectify the situation can contact the Credit Ombud Office for assistance. This service is provided free of charge to consumers.
Of note was that enquiries to credit bureaus from banks and other financial institutions accounted for 65,4%, retailers (9,7%) and telecommunications providers (13,1%) over the past quarter. However, although enquiries from banks and other financial institutions increased by 36,1% on the previous quarter, enquiries from retailers decreased by 26,7% and telecommunications providers by 0,5%.