Give me credit!
Almost no one reads the small print on any contract, especially a contract when you apply for a bank account. The scary thing is that by signing this contract, with the fine print included, a credit record of this application is created for you. And what’s even scarier is that this record can last for decades, with your permission, even if you end up not getting the bank account.
How is your credit record constructed?
The main credit bureaus collect their information from a variety of sources. However, they don’t guarantee that this information is accurate. The bureaus rely mostly on the information that you, the creditor, give them. Even their own reports do not highlight contradictory data: It is up to the user to determine the facts and how accurate these facts are. And sometimes the errors in this data can lead to serious miscommunication:
- Typographical errors and miscommunications, which call centres are famous for, can, for example, turn “Achter Rd.’ into ‘Arthur Rd.’
- Sometimes, the information is simply wrong, perhaps turning a client into an employer or linking the person to an address they know nothing about, making it look like they’re hiding something.
- If there are gaps in employment or address records, the person could be trying to avoid revealing what he was doing during this period of time, e.g. being in jail.
The credit bureaus are also linked to external databases, such as the deeds offices and the Companies and Intellectual Property Commission (CIPC).
15 Items that most credit reports supply:
1. Names;
2. Date of birth;
3. ID number;
4. Marital status;
5. Last-known and most-recent addresses;
6. Last-known and most-recent phone, fax and cellphone numbers;
7. Last-known employers;
8. Properties owned;
9. Company directorships;
10. Recent enquiries;
11. Adverse reports (often prior to a judgment);
12. Trace alerts (flagging ‘wanted’ persons);
13. Employment history;
14. Credit enquiries; and
15. Civil court judgments.
Use a registered investigator to get a more thorough credit check
As you can see, the data from the bureaus is basic, often incomplete or outdated. This is one of the main differences between just buying an online credit check, which may deliver confusing information, and using a registered investigator to analyse the search results and deliver an accurate report.
Remember: A civil court judgment is not always a bad thing
Let’s have a look at this example.
John does a job for Mike. He gives Mike a bill for R20 000. Mike is not happy with the job and is only willing to pay half. John takes Mike to court. The court finds in John’s favour but agrees with Mike about the value of the work. He orders Mike to pay only R10 000.
So who won?
Mike did but he still could have a judgment against his name for R10 000, although some bureaus will mark this as a ‘settlement’.
So it pays to discuss anomalies with serious candidates.
Bureaus have more detailed information at their disposal
This information details, for example:
- Amounts you’ve borrowed;
- Your payment patterns; and
- Other financial information, which most people would regard as private.
However, this level of information is only disclosed to credit providers and not to potential employers.
However, if you, as a potential employer, want to see a potential candidate’s full information, under the National Credit Act regulations the applicant is entitled to request a free full credit report once a year. You can request this from him. If, for example, you are hiring a cleaner, this might be excessive but if the person is being considered for a financial post it could indicate if he’s in financial trouble and therefore a risk
Credit reports are not expensive
Subscriptions to credit bureaus start at around R350 per user per month. Basic reports on individuals start at about R10 and can go into hundreds of rands if you need a more detailed report. A comprehensive report will cost you is about R70 but will require some experienced analysis to uncover the true situation.
