Protect Your Credit Score (With Your Life)

Credit Report will be our today’s discussion and will address the role, duties, and responsibilities of the Credit Report Agency, what your credit report (profile) means, how to obtain the information, how you keep it clean and avoid negative listings; and understanding and guarding your personal credit score that affects your access to credit and helps keep your credit status healthy.

“You must tell your money how you want to live; and not any other way or not the other way around”

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Role, Duties, and Responsibilities of the Credit Report Agency

Credit reporting agencies are also known as Credit Bureaus, such as Experian, Transunion, Kredit Form, XDS, ITC, and Compuscan, just to mention a few popular ones, and we are reliably informed that there are 13 credit bureaus currently in existence here in South Africa (I encourage you to check your relevant agency in your country via Google). Ours are all regulated by the National Credit Regulator (NCR).

Amongst some of their duties and responsibilities is that they store a database of all credit and keep track of all information and reporting on individuals and companies to help credit providers (creditors, suppliers, lenders, financial institutions, and companies such as debt collectors and counselors) make an informed decision on which individuals and companies to conduct business with.

Credit Bureaus keep a profile (collecting data from banks, credit providers, and formal & informal institutions) of each active person who has, for example, credit/loan/retail accounts, except when paying by cash. This information contains the loan size; when the credit was taken; payment and non-payment history; as well as the debt paid off and the date thereof.

This information (a record) is updated regularly and is made available to credit providers on request & you also have access to it. When they want to know whether to grant you an extension to credit or not and even when you apply for a job (though, this information should not be used as a form of punishment against those who are looking for jobs unless the job role is specifically related to handling financial duties & responsibilities which is fair, reasonable and understandable).

Potential credit providers use this information to determine how likely you are to pay back your debt on time. The strength of your rating can impact the granting of credit, obtaining favorable payment terms and preferable interest rates to be charged. Can you now see the importance & impact of keeping your credit profile squeaky clean?

Implications of Your Credit Record & Your Score

The starting point is that if individuals want to create and keep a clean tiptop shaped credit report (history) to protect and continuously improve their credit score, remember that this information is a mirror image or a reflection of you and it never lies, i.e. how you conduct your own life-your financial affairs, how you handle or manage your own credit, and whether you can be trusted and relied upon to handle any debt or credit size if or when granted; It is critical that you be diligent and protect and guard your personal information with your life-never ignore or take it for granted.

You never know when you’ll need a lifeline; instead of being careless and reckless and ending up financially stressed and stretched out, be cautious and patient.

The following steps will help you avoid negative listings and keep your credit record clean:

• Review your credit report regularly: It is important that when active customer reviews their credit report, they check that the information displayed is correct, and accurate and it reflects their own knowledge of how you manage your credit (finances); so look for errors, old accounts that are still listed as active (it must be zero) and other inconsistencies such as being a victim of identity theft or incorrect information that was given or supplied by the credit provider.

Checking your credit report on a regular basis provides the following benefits: your own understanding of how you manage your personal finances, as well as confidence that anyone evaluating your financial affairs will receive accurate, up-to-date, and correct information.

The South African National Credit Regulator (NCR) allows consumers to evaluate their personal credit score instantly, free of charge, once a year, from all the credit agencies. However, we have also provided a list of a few credit bureaus below. Please check them out! 

• Update your details: If you find out, that, the information on your credit report is error-free, missing any critical information, or outdated then you must take steps to correct it, by contacting the credit bureau concerned, to fix the mistakes, so that the information can be investigated and updated with correct and accurate details.
  
  
• Pay your bills on time: By paying your bills on time(due dates) will positively affect your credit status. Credit providers will gladly and willingly grant an individual access to credit, if & only if, timely payments are reflected on their credit history; as it reflects & displays responsible personal financial management of the individual under review(evaluation); in fact they all line up and tempt you with all kinds of fancy & enticing credit extension offering; be careful unless you really need it.
  
  
• Negative listings at credit bureaus: Being negatively listed on credit bureaus can limit or eliminate your chances of obtaining access to credit, especially from reckless decisions to over-extension or not to pay your accounts on time. Thus taking action & responsibility will create a financial position that will put you in good standing, to qualify for credit when the need arises.
  
  
• Apply for access to credit: Credit providers are highly unlikely to grant individuals access to credit with shaky credit histories; obtaining credit can be a way to demonstrate creditworthiness. As you begin to pay back the credit responsibly, you will build a strong, stable, and reliable credit history, but be extremely careful not to over-extend yourself when you receive enticing marketing campaigns that want you to spend, receive a voucher or discount, or take out a loan and pay later.
  
  
  Please bear in mind that these costs (interests) are charged back to your account and result in increased initial credit extended to you, high interest rates, and capital paid thereafter. Remember, “there is no such thing as FREE lunch”—someone must pay or has paid.

Credit Repair Secret Tips To Help You

Most people don’t realize it, but there are actually several credit repair secret tips that you can use to help undo the damage that’s been done to your credit score. None of this information is widely available or advertised. Why would it be? An uninformed consumer is a sitting duck to all the threats and harassment from creditors. Don’t ever forget, though, that you do have rights and that debt collectors (creditors) have strict rules that they have to follow.

The “first thing you want to do is make sure that whatever negative things are on your credit report are accurate. It’s important to check your credit reports from all three most popular credit bureaus at least once a year, and it is FREE. If you “find a mistake”, contact the credit bureau immediately in writing and request that it be corrected.  

This simple tip can help you raise your score and get rid of inaccurate information that has been costing you money at higher interest rates. When you contact a credit bureau, keep a detailed note as to the date you sent the letter or email; sending it certified or registered mail may be a good idea, as well as a copy of the email or letter you sent them. Unfortunately, sometimes the credit bureau isn’t right on top of everything. It’s a good idea that you keep track of everything in case they try to jerk you around.

When you are requesting that something be changed, you don’t have to be timid. Don’t treat them like you are a servant requesting a favor. Of course, you want to be polite and professional, but you aren’t asking them for a favor; you are asking them to correct a mistake. Don’t let them push you around.

Don’t expect this process to happen quickly. By law, the credit bureau has up to 30–45 days to get back to you, but sometimes it can take much longer. This is a process, and you have to let the process work its way out, no matter how long it takes or how aggravating it can be. If you want to work on your credit because you are seriously considering buying a new home or car and you want to get approved, don’t wait until the last minute. Start right now with repairing your credit. Remember, this is a process, and it will take time.

While you are waiting for the process to work, make sure that you keep your side of the deal plain and clear and make all your payments on time. That includes all your household bills, such as cellphone contracts, store cards, and electric (power) bills, and not just your loan payments. You may not realize it, but all companies that you have credit with can report you to the credit bureaus too, and late payments can affect your credit score.

You can rebuild your credit without resorting to underhanded tactics if you’re willing to devote the time and consistency it will take, and that may well be the biggest credit repair secret of all. Don’t forget, the sooner you get started, the sooner you’ll qualify for a great rate on that new car loan or mortgage, and that will be great! Why wouldn’t it?

Take on Precautions!

A word of caution, practice maintaining self-control and avoid being enticed, tricked, or lured by smooth-talking call center sales agents or consultants working for credit providers who would sweet talk you into taking on more credit than you need at the time. That is a debt trap—stay away from it.

In fact, walk away from it (remember, they also have targets to meet, and they will do anything possible and lure you to get to take up credit that you do not need and you regret it later; by the time you realize it, it’s already too late and you cannot get out of the contract or the other option is pay the money back.

Please bear in mind that nobody should force you into taking up anything that you do not want. You have every right to say “No.” By so doing, walking away, you would have achieved and fulfilled smart financial management control and avoided unnecessary temptation, heartache, headache, and stress.

Handling your debt responsibly and maintaining a positive listing against your precious name will go a long way toward putting you in control of your own personal financial journey, which will help you obtain well-deserved, responsible, manageable credit that you can handle.

You will be proud of yourself and be glad you did. Taking precautions is the first step to ensuring that you take charge of your finances and achieve smart financial well-being.

Resources

Obtain your FREE credit report to check your credit score: www.credit4life.co.za, www.transunion.co.za, www.freecreditscore.co.za

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