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) mean, how to obtain the information, how do you keep it clean & avoid negative listings, understand and guard your personal credit score that affects your access to credit & 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

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Credit report agencies also known as Credit Bureaus, such as Experian, Transunion, Kredit Form, XDS, ITC, Compuscan just to mention a few popular once 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) and amongst some of their duties & responsibilities is that, they keep track of information and report on individuals and companies to help credit providers (creditors, suppliers, lenders, financial institutions and companies such as debt collectors & counsellors) to make an informed decision on which individuals and companies to conduct(do) business with.

Credit Bureaus keep a profile(collect data from banks, credit providers, 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 was the credit taken; payment and non payment history; as well as debt paid off and the date thereof.

This information (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 (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 favourable 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

How does your credit report affect you, the starting off point is this, if individuals want to create and keep a clean tiptop shape credit report(history) to protect and continuously improving one’s 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 can you be trusted & relied upon in handling any debt or credit size if or when granted; It is critical that you should be diligent and protect & guard your personal information with your life – never ignore or take it for granted.

You never know when you will need the Lifeline, rather be cautious and patient instead of being careless, reckless and end up being financially stressed & stretched out.

The following steps will help you avoid negative listings & 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, accurate and it reflects your 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.

By regularly checking on your credit report, it serves the following benefit that your own knowledge, 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 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 also have other credit bureaus, such as Free Credit Score, Credit 4 Life and Transunion that offers this service for free. Please check them out below the post. 

  • Update your details: If you find out, that, the information on your credit report is in error, missing 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 bureau can limit or eliminate your chances of obtaining access to credit, especially from reckless decisions to over-extend 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 & 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 on your account and result in increased initial credit extended to you and high interest rates and capital paid thereafter. Remember “there is no such thing as FREE LUNCH”- someone must pay or has paid.

Take on Precautions

A word of caution, practise Self- control and also do not fall into the trap of being enticed, tricked, lured, from smooth talking call centre sales agents or consultants who work for credit providers, who would sweet talk you into taking up more credit, that you do not need at the time – that is a debt trap-stay away far from it. In fact walk away from it(remember they also have targets to meet and they will do anything possible and legal to get you to take up credit that you do not need and you regret it later; by the time you realise 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 & fulfilled smart personal financial management principles and avoid unnecessary temptation, heartache, headache and stress. In handling your debt in a responsible manner and keeping a positive listing against your precious name will go a long way in being in control of your own personal financial journey, which will assist you, in obtaining a well deserved, responsible, manageable credit that you can handle. You will be proud of yourself &  be glad you did. Taking precautions, is the first step to ensuring that you achieve smart steps to  financial freedom.

Resources

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

Please leave a commment, or a question or share your story and we will get back to you.