Credit Record

Why do credit records exist?

By recording how you pay your debts companies are better able to determine how risky it is to lend money to you. For that reason, almost all credit providers submit your payment behaviour to one or more credit bureaus. If you skip payments that is recorded. Likewise, if you pay that is also recorded. Any collection action taken is also recorded, so if your account has been handed over to a debt collector or if a court has granted a judgment against you that will also be recorded.

A poor credit record, with negative listings and payment data, shows that you have a bad reputation for honouring your payment obligations. Credit providers will penalise you by charging additional interest if you have a poor credit record. They can easily justify charging you more interest as your poor credit record means you are more likely to default on your payments.
A poor credit record is something you should fix before you are declined credit or end up paying a fortune for it.

Fixing your credit record

If you apply for credit with a poor credit record you "asking" to be charged more, by way of interest, for the credit you are "given".

It doesn´t make sense to apply for credit before first checking your credit record and improving it by removing any judgments or paying up any overdue accounts and having them noted as paid.

Logan Attorneys, specialise in assisting people to correct their credit information so that they not only qualify for credit but are also charged less for the credit they use. We are passionate about helping people and believe this will not only save you lots of money but will also help you take charge of your financial situation and put you back in control. To request a free, no obligation quote to correct your credit record, please Logan Attorneys by clicking here.

Once you have cleaned up your credit record you can apply for credit with the expectation that your application will be granted and you will be charged at or around the prime (or best) lending rate.

It is not good enough to then sit back and forget you have a credit record. This is a mistake many people make and it ends up costing them dearly. Instead you should ensure your payments are accurately reflected as having been paid on time, by regularly checking your credit record for missed payments or other negative information. Credit Record sells a consolidated credit record and you can get these sent to you monthly to ensure the information being recorded on all three of the main consumer credit bureaus is accurate.

If you find you have missed a payment, you must investigate this and correct the situation. As soon as you have paid an account this must be reflected - leaving it appear as if the account was never paid is negligent and will end up costing you.

Many consumers are unaware that they have a right to their credit information being accurately recorded on their credit records. This right is set out in section 72(1)(c) of the National Credit Act 2005 (NCA). Unfortunately, there is little understanding of how to improve ones credit information and benefit from the resulting improvement in your credit score. That is where we want to help. We believe that consumer rights are important and that we can help people pay less interest by using their credit record to secure cheaper finance.

Whether the information on your credit record is wrong or simply needs to be improved you have rights and can take action.

Shopping for credit

Most people have no idea they can shop for credit. From 1 June 2007 the NCA requires all credit providers to provide an easily comparable, binding quote which is valid for five days. This means when you want to buy a car, home or any other asset on credit, you can apply for credit with different credit providers and compare their terms rather than just accepting whatever you are offered. The credit provider with the lowest rate is bound to enter into the credit agreement with you during those five days.

The cost of credit

When it comes to small amounts, a 1% reduction in interest may only save you a couple of hundred Rand over time but, small as it may seem, a lower rate of interest will save you many thousands of Rand on bigger purchases such as a car or home, especially where the credit is repaid over five or more years. So, don´t be fooled - remember that the interest rate you are offered is negotiable and if you have a good credit record you are entitled to expect a lower rate of interest, of prime or thereabouts. It is worth making several applications for credit on the same day and using your improved credit record to get the best rate possible.

Banks usually make a massive profit on the difference between the interest rate they are charged by the Reserve Bank, called the REPO rate, and the prime rate. This differential between the REPO and prime rate is usually 3.5% (you can find out what the rates are on the Reserve Bank´s website by clicking here). So, asking for the prime rate means you are already paying 3.5% more for the credit Banks obtain from the Reserve Bank. In other words, even when given the prime rate, the Bank still makes 3.5%.

Obtaining your credit records

You can obtain your credit information from all of the registered credit bureaus free of charge once per year in terms of the NCA.

The application form is usually quite extensive and the credit bureaus use the information collected to update their database. This means that in return for providing you with a free credit record you are giving them information they will share with others (to the extent allowed by the NCA).

If you prefer to get your credit record in a more secure manner, please click here and you will be taken through the Credit Record secure order process and could have your credit profile in minutes!

We hope that you do not sit back and accept whatever rates of interest are offered, but are proactive and take action to improve your financial reputation and qualify for the lowest interest rates possible.