If you’re not reading your free credit report, you could be putting your financial health at risk. But you’re not alone: According to the Credit Bureau Monitor Report*, only 188 000 South Africans access their credit report every year - out of a total of 25 million credit-active consumers.
Regularly reviewing your credit report should be at the top of the list of your personal financial habits. It can tell you the state of your financial background, your personal payment history, and your creditworthiness. It even flags identity theft and consumer fraud. But to benefit from reviewing a credit report, you have to not only read and understand it, but know how to use the information it contains to your advantage.
A credit report is a record of your credit history and payment behaviour that is maintained by credit bureaus, such as TransUnion. It reflects a 24-month view on your account history and payment behaviour. It contains both positive and negative information about how you manage your credit. Your report details:
Every month, lenders send information on your credit and loan history, and your payment record, to credit reporting companies like TransUnion. This information is then analysed to create your credit report.
Excellent question. Your credit score is formulated from the information contained in your credit report.
Having a high credit score might help you to get a lower interest rate on credit products such as a house or vehicle loan. A credit report with negative listings such as defaults and judgments; as well as too many enquiries for loans or credit over a short period of time could result in a low credit score, which means you may pay a higher interest rate, or even be denied credit.
The biggest influence on your credit score is your account payment history – that is, how you manage your accounts and whether you pay your accounts on time. Focus on paying the full instalment of every bill on time, so you’re offsetting past negatives with more recent positives. It also helps to maintain a healthy mix of credit - store accounts, credit cards, home loan, and service contracts such as cell phone accounts - to establish a good credit history.
When you apply for credit – like a home loan, a car loan, a new credit card, a clothing store account or a new cellphone contract – banks and lenders will access your credit report as one of the factors to assess if you’re suitable for credit. Other companies that may view your profile include insurance companies, landlords and even employers. But they need to get your permission first.
Good news: your credit reports are easy to obtain.
You can download your Credit Report once every 12 months for free from TransUnion.
Often, consumers have errors on their credit reports that affect their credit scores. Request your report and check for mistakes, such as payments marked late when you paid on time or negative information that’s out of date. If you see errors or discrepancies, you can contact TransUnion on 0861 482 482 to lodge a dispute. Provide as much supporting documentation as possible, like receipts or evidence of payment. TransUnion will investigate and respond within the legislated 20 working day period.
What are you waiting for, download your Free TransUnion Credit Report today!
*National Credit Regulator: Credit Bureau Monitor Report Q2 2019