Listings found on a Credit Profile

Debt-related issues can present significant challenges for individuals, affecting their financial stability and prospects. Understanding the various types of listings that can appear on a credit report is crucial in navigating the complexities of the credit system. In this article, we will explore four common types of listings found on credit reports: payment profile information, adverse information, judgments, and notices. Each listing carries its own implications and can impact an individual’s ability to access credit. Additionally, we will briefly discuss the role of credit bureaus, the Independent Tribunal for Consumer Complaints (ITC), and the process of reporting reckless credit to the National Credit Regulator.

Payment Profile Information

One type of listing that may appear on your credit report is payment profile information. This listing is dynamic and changes monthly based on your payment behaviour with clothing and other accounts. When you skip a payment, it gets recorded on your credit report. Unfortunately, there is no way to remove this type of listing from your report. Potential creditors take payment profile information into consideration when evaluating your creditworthiness, but in most cases, you may still be granted credit despite these listings.

Adverse Information

Another type of listing that can impact your credit report is adverse information. This occurs when you consistently miss payments or fail to pay on time, leading your creditor to notify the credit bureau and label you as a ‘slow payer,’ ‘default,’ or ‘write off.’ Removing adverse information requires writing to your creditor, providing valid reasons for the arrears, and making payment to bring your account up to date. Valid reasons may include hospitalization or retrenchment, and it’s important to include supporting documentation. Ultimately, the decision to remove the listing rests with your creditor. While you may still be granted credit in most cases, it could come at a higher cost to you.

It’s worth noting the impact of the Removal of Adverse Consumer Information and Information Relating to Paid-Up Judgements Regulations, 2014. Some data on your credit report, specifically adverse information dated before 1 April 2014, was ordered to be removed. However, this removal does not absolve you of any outstanding debts to your creditor. Future creditors will no longer see the old adverse information when evaluating your credit application, but it is important to address any remaining obligations.

Judgments

Skipping multiple payments, disregarding creditor communications, and receiving letters of demand or summonses can lead to judgments against you. A judgment confirms the debt owed, including interest and legal fees, and provides your creditor with the ability to enforce the debt for a prolonged period. While ordinary debts typically prescribe (expire) within three years since the last payment or acknowledgement, a court-ordered debt only prescribes after thirty years. Consequently, having a judgment against your name can significantly impact your loan applications, often resulting in rejection by potential creditors.

Notices

The most severe type of listing is a notice, which arises when an individual has been sequestrated (declared bankrupt) or placed under administration. Removing a notice requires a court application, highlighting the seriousness of this listing. Loan applications are almost certain to be declined when notices appear on an individual’s credit report. Creditors who grant credit under such circumstances may even be held liable for acting recklessly.

Credit Bureaus and Reporting Reckless Credit

Credit bureaus play a vital role in compiling and maintaining credit reports. They collect information from various sources and provide these reports to creditors when assessing creditworthiness. In South Africa, the ITC is one of the major credit bureaus.

If you believe you have been granted credit recklessly or in violation of the National Credit Act, you have the right to report it to the National Credit Regulator. The National Credit Regulator oversees the credit industry and aims to ensure fair and responsible lending practices.

Blacklisting is a term commonly used, but it is important to note that there is no official “blacklist” maintained by credit bureaus. The notion of being blacklisted typically refers to a situation where an individual’s creditworthiness has been severely impacted due to negative listings on their credit report, such as adverse information, judgments, or notices. When creditors threaten to blacklist someone, they are essentially warning that the individual’s creditworthiness may be significantly compromised, making it difficult for them to access credit in the future. While there is no formal blacklist, potential creditors can assess an individual’s creditworthiness based on their credit report, and a poor credit history can indeed hinder their ability to secure credit approvals. It is crucial for individuals to take proactive measures to address outstanding debts, rectify payment issues, and maintain a positive credit profile to avoid the challenges associated with being perceived as high-risk borrowers.

In conclusion, being aware of the different types of credit listings and their implications is essential for managing your financial health. Regularly monitoring your credit report, addressing arrears, and reporting reckless credit are crucial steps toward maintaining a positive credit history and accessing credit opportunities.