How long does negative information remain on your credit report?

Your credit report is a record of your payment behaviour. It tracks all your accounts and indicates where, over a period of two years, you have missed payments or gone into arrears on an account. Then after two years, this adverse information simply disappears. Right? Yes and no, your credit report contains all the positive, as well as negative information about your payment behaviour. In addition, it includes information which may, or may not be considered negative by a credit provider. Some of this information may remain on your credit report for a longer or shorter period. A court judgment, for example – where a court issues an instruction to you to pay an outstanding amount – will remain on your credit report for five years. If you pay the full amount owed before that time, the judgment will be removed from your credit report as soon as the credit bureau receives either proof of payment from the credit provider or a valid court order rescinding the judgment. It is therefore vitally important that consumers who have had judgments against them and have paid the outstanding judgment debt, check their credit reports to ensure that this negative information no longer remains on their credit record. It is important to remember however that judgment debt is usually higher than the original amount owing. This is because it includes the original debt plus any other costs that may have accrued, including interest and legal charges. Other potentially negative information which could be contained in your credit report includes:

  • Enquiries. Every time a consumer applies for credit, the credit prover will make an enquiry about the consumer’s credit record. This information is recorded and will reflect on the consumer’s credit report for one year. A high number of these enquiries could indicate that you are “shopping around” for too much credit, which could indicate that you may be in financial difficulties.
  • Complaints. If you lodge a complaint about your credit report and your complaint is rejected, this information will be reflected on your credit report for six months.
  • Adverse classifications relating to an enforcement action taken by a credit provider. If you don’t pay your account and the credit provider takes action against you, such as sending you a letter of final demand, this information will remain on your credit report for one year. If you pay the full amount owed before that time, the information will be removed from your credit report as soon as the credit bureau receives proof of payment from the credit provider.
  • Adverse classifications relating to consumer behaviour. These classifications are more subjective than those relating to enforcement actions. For example, if you continually pay your accounts late, a credit provider could have you classified as a “late” or “tardy” payer. This classification remains on your credit report for one year. If you pay the full amount owed before that time, the information will be removed from your credit report as soon as the credit bureau receives proof of payment from the credit provider.
  • Debt restructuring. Information relating to applications for debt restructuring remains on your credit report until a clearance certificate is issued.
  • Sequestration. A sequestration order remains on your credit report for five years, or until a rehabilitation order is granted. A rehabilitation order will continue to reflect on your credit report for a further five years.
  • Administration order. If you have applied to be placed under administration, this will remain on your credit report for five years or until the administration order is rescinded by a court.

Other information that may appear on our credit report includes:

  • Trace. A trace alert is placed on your credit report by a credit provider who has been unable to make contact with you and has asked to be notified when any updated contact information is loaded on to your credit report.
  • Consumer remarks. You can ask that TransUnion include an explanation of facts or conditions that affect you on your credit report. For example, if your identity document has been stolen, you may want this information included in your credit report to try and prevent your identity being used fraudulently.

If you believe there is any information on your credit report that should not be there, or that should have been removed, you should immediately lodge a dispute with the credit bureau. The bureau is obliged to investigate and respond within 20 days.