Make sure you know more about your credit report than your creditors do.

Mosala wrote to me when she discovered that she had been ‘blacklisted’. She had lost her job and fallen behind on some payments, and wanted to find out out who had blacklisted her.

Salem Dyafta, consumer brand manager at TransUnion explains that the term ‘blacklisting’ can be misleading. “Credit bureaus do not keep a list of individuals who do not pay their bills or are too risky to grant credit to. All the credit provider does, is provide the credit bureau with information about your payment behaviour – good and bad. This information is then included in your credit report.”

As Dyafta explains, if your credit behaviour is good and you pay the full amount owing on your accounts on time every month, this will be reflected in your credit report and it may help you to obtain more credit when you need it. But if your credit report shows that you don’t always pay what you owe each month, it may work against you.

Dyafta says one or two late payments should not be a problem. “Anyone can forget to pay occasionally. But if your credit report reflects a regular pattern of late, partial or non-payments, it could affect your credit rating, which in turn could affect your chances of getting credit, or it could result in credit providers offering you less favourable terms such as a higher interest rate,” says Dyafta. It could even have an impact on your job prospects.

Negative behaviour can stay on your credit report for 24 months, while judgements can remain on your report for up to five years, or until you pay off the outstanding amount in full.

The problem is that should your payment history show that you have defaulted, it is unlikely that you would be able to obtain more credit – which leads to the idea of ‘blacklisting’. It is therefore very important that you regularly check your credit record to understand your payment history and also to identify any negative listings.

Payment profiles are automatically sent to bureaus, however, according to the Credit Ombud, if a consumer has a default (as opposed to late payment) they would need to be notified in writing 20 business days before this negative listing can be sent to the bureau. Unfortunately it is up to the consumer to prove they did not receive this communication. In the case of Mosala, if she was not notified by the credit provider, she can lodge a complaint with the bureau and if the investigation finds that she did not receive the proper notice, the default may be removed. The credit provider will then have to notify the consumer before they resend the default to the bureau.

Mosala would first need to check her credit record to see which creditor or creditors have listed her for defaulting on a loan.

Obtaining your credit record

A consumer is entitled to one free credit report per year from each of the credit bureaus. This report will show your payment history and the various accounts that you have. Checking your record is not only to check your payment history but also to protect yourself against ID theft. You would be able to tell from the report if loans or accounts have been opened illegally in your name. Credit bureau Experian includes a credit rating in their free report.

The credit bureaus may charge for a more detailed report, which would include additional information such as your credit score or a list of enquires made on your credit profile. For a fee of R60 for example, you can get a more detailed credit report from TransUnion which will include your credit score.

Understand your credit score

According to Dyafta, your credit score is a number calculated by a credit bureau using the data in your credit report. This includes payment history, the level of debt, length of credit history and also the number of new accounts opened in a short space of time.

The TransUnion credit score provides you with a score between 0 and 999 – the higher the number, the better your credit profile. Experian’s credit rating ranges from 1 to 5, with a rating of 1 as excellent and 5 as very poor.

Although not necessarily an endorsement, your credit bureau credit score does give credit providers a quick and easy overview of your general credit behaviour and an indication of whether a credit provider is likely to regard you as a poor or excellent credit risk.

It is best that you get reports from at least the two major credit bureaus (Experian and TransUnion), as sometimes one bureau will have information that is not listed on the other bureau.

• TransUnion – click on Products, then Annual Credit Report
• Experian – click on Consumer Services, then Register Now