What is my credit report?

If you have credit of any kind – a credit card, a bank loan, a cell phone contract or a store account, for example – you will have agreed to the provider accessing your credit report to assess your financial position and your debt-repayment history. 

Your credit report is basically your financial CV, reflecting your credit / debt status at a particular time, and your past performance as a user of credit. Unlike the CV you put together for prospective employers, your credit report is compiled without your input, from information provided to credit bureaux by entities who have had, or still have, an interest in how reliable you are financially. Read more: Who is doing credit checks on me?

Credit reports are used mainly by credit providers, such as banks, but they are accessed by others too, including landlords looking for reliable tenants and employers who need to verify your financial integrity as a candidate for a job.   

Do I have any input on my credit report?

A “good” credit report is as important as a “good” CV, yet only a tiny fraction of the 25 million South Africans who use credit have ever accessed their credit report. For most of us, credit checks are just one of the hurdles we have to clear, by what we assume is an obscure process over which we have little control.

In fact, knowing where you stand in the credit universe can be empowering: either you have a great record and can confidently apply for credit when you need it, or you have made some mistakes and knowing where the weaknesses lie in your record can help you remedy the situation as soon as possible.

Equally important is the integrity of such an important report. Incorrect information in your report can be challenged, and if you don’t get satisfaction through the credit bureau that produced the report, you can escalate your dispute to the Credit Ombud or lodge a complaint with the NCR (see contact details below). 

 
Why do I have a credit report?

The National Credit Act (NCA) aims to protect consumers by making sure credit is not given to anyone who might struggle to repay it. In order to achieve this, the Act obliges credit providers to determine your creditworthiness by assessing:

• Your current financial means;

• Your credit repayment history; and

• Your understanding of the long-term implications of credit.

In terms of the NCA, any entity that provides credit is required to keep records and to supply information regularly to a credit bureau registered with the NCR. This information goes into your credit report and is confidential unless you give permission for a third party to access it.

The information in your report includes:

• Personal identifying information;
  
  
• Employment, past and present;
  
  
• The details of any fixed property you own, or have owned in the past;
  
  
• Account information, including the names of all banks and businesses that have lent you money or given you credit, the loan amounts or credit limits imposed on you; and your payment record;
  
  
• How much of your available credit you are using currently;
  
  
• How far back your credit history goes; 
  
  
• How many times you have applied for credit recently, and who has been looking at your credit record; and
  
  
• Adverse information about your management of credit, ranging from details of late payments to court judgments against you.
  
  

What is my credit score?

This is a three-digit number - for example, between 0 and 999 - that sums up your credit risk.

There is no single, definitive score for anyone, so don’t be surprised if the score you get from one credit bureau is different from another bureau that a lender is relying on. The information held by credit bureaux varies and they all use different methods of scoring.

A large credit bureau that has scores between 0 and 999 puts the average score in South Africa at between 583 and 613, with most mortgage lenders requiring a score of at least 600 to justify a home loan. 

A score on this rating above 767 is excellent and would probably be rewarded with a low interest rate on a substantial loan.

Free access to your reports

Because your credit record is so important, you are entitled to one free copy of your credit report from every NCR-registered credit bureau every year, so that you can monitor the information that is going out to credit providers and others.

This is useful because it allows you to:

• Identify incorrect or incomplete information and take it up with the credit bureau. If your complaint is unresolved you can complain to the Credit Ombud. Read more: Where to complain.
  
  
• Ask for information that is outdated to be removed. All the information that goes into your credit report has a time limit.
  
  
• Identify credit card fraud or identity theft sooner rather than later.
  
  
• See the impact of missing payment deadlines, or defaulting on debt.
  
  
• Recognise if your credit report is flawed and where and how to improve it.
  
  
• Improve your chances of success when applying for a loan, by taking steps to improve your report before you apply.