My Credit FAQ's
- Who is TransUnion?
- Who is ITC?
- Why do we need credit bureaus?
- Why was I told that TransUnion declined my credit application?
- Where does TransUnion get the right to store my information?
TransUnion is a registered credit bureau and a repository of credit information on consumers and businesses. In other words, we store information on how you pay your accounts as it is provided by credit/service providers and courts on time in regular instalments, or not.
TransUnion enables credit/service providers to make fast and informed, reliable and objective lending decisions. This makes it possible for them to approve loans and credit to you.
In 2003 the company name changed from ITC to TransUnion. The reason for this name change in South Africa was to bring together and more clearly identify our company with the 25 other TransUnion companies globally. TransUnion creates advantages for millions of people around the world by gathering, analysing and delivering information. We provide the tools, resources and education to help them manage their credit health and achieve their financial goals.
Why do we need credit bureaus?
Credit bureaus play a very important role in the economy as they make it possible for 18 million consumers in South Africa to buy now and pay later on credit instead of saving the full amount before they can make a purchase.
Credit/service providers rely on credit bureaus to minimise their risk, which makes it possible to extend credit. This also helps stores and banks keep the price of goods down by extending credit to consumers they can trust.
Why was I told that TransUnion declined my credit application?
TransUnion does not make the decision to grant or deny credit. Different stores or banks have different rules/credit-granting policies that they use to decide if credit should be granted and to determine how much risk they want to accept. To make a decision to give you credit or not, stores or banks will likely look at your credit report, provided to them by TransUnion, as well as the information you supplied in your application form, your affordability calculation, along with other credit assessment tools such as credit score.
Where does TransUnion get the right to store my information?
When you complete a credit application form, there are several legislated contractual clauses that you agree to when you sign the application form. You give your consent to the store or bank to submit the information provided on the application form to the credit bureaus for verification of the information you provided. You also give consent to the store or bank to submit this information to TransUnion credit bureau to store it on their database. You consent to the information being shared with any other stores or banks that may enquire on you.
Note: You also consent that should you pay late this information will be forwarded to the bureaus by the store or bank.
- What are the basics about credit?
- What is Credit?
- What is a credit report?
- Who can view my credit report information?
- What is a credit/service provider?
- What is a judgment?
- What is default information?
- Why have I been turned down for credit?
- Once I paid the default, why is it not removed?
What are the basics about credit?
It is more important than ever to know your credit standing. Businesses, ranging from insurance companies to some employers, now review consumer credit information as a routine part of their application processes.
Credit is the option extended to you by credit/service providers to enable you to purchase their products or services in a buy now, but pay over a certain timeframe’ agreement. It means that you are given more time to pay your debt, while being able to enjoy the benefit of the purchase immediately.
A credit report is information about your credit history payment behavior that is maintained by credit bureaus, including TransUnion. It contains information such as your name, address, employer and ID number - the details you give to credit grantors when completing a credit application form.
TransUnion also keeps details on your credit history such as your account history and history of paying habits, that is, whether you pay your accounts regularly and on time. A credit report does not contain any data such as race, religious beliefs, political affiliations or medical histories.
Who can view my credit report information?
You give permission to credit grantors to view your credit report when you apply for credit and you submit a credit application form. Your credit report, along with other decisioning tools that they use to process credit applications, helps them decide whether or not to grant credit to you. In order to get credit you have to give the store information to help them understand you and your credit worthiness.
What is a credit/service provider?
A credit/service provider is a store, bank that gives credit to consumers. This allows you to obtain what you need on a 'buy now and pay later' plan.
A judgment is granted by the court against a consumer who has not paid their debts to a credit/service provider. A judgment is public information and remains on your credit report for 5 years or until the judgment is rescinded by a court or paid in full. Consumer no longer have to get the judgment rescinded in court.
Default data is negative information supplied to TransUnion by the store or bank if you default on your credit agreement with them, that is, if you fail to pay your account.
A default remains on your credit report for 2 years or 1 year, depending on the description of the default. Subjective classifications of consumer defaults remain for 1 year. Consumer default classifications where enforcement action is taken - such as bad debt written off or handed over, credit card revoked or repossession - remain on your credit report for 2 years.
Default data will be removed once the default is paid in full. Once the default has been paid, the lender has seven days to update their information and inform the credit bureaus of the paid up status. The bureaus, in turn, have seven days from receiving the notification from the lender to amend your credit report.
Why have I been turned down for credit?
Only the credit/service provider with whom you applied for credit can tell you why your application was declined. The credit/service provider must provide you, in writing, with the reason why your application was declined. If the reason is due to an adverse report from the credit bureau, (that is, an adverse listing on your credit report), the credit/service provider must supply you with all the necessary contact details of the credit bureau.
Each credit/service provider sets their own credit assessment criteria and these will differ from company to company and product to product. They measure your affordability by comparing your income and expenses. Over and above the credit report, they measure your affordability by comparing your income vs expenses, information supplied by the applicant (you) regarding employment details, number of years at current residence, if the applicant (you) owns a home, number of dependants, etc.
Once I paid the default, why is it not removed?
Credit bureaus are required by the National Credit Act (NCA) to retain this information on the consumer's report for the prescribed retention period - regardless of whether it reflects negatively or positively on the consumer. Therefore this information may not be removed before the prescribed data retention period.
Most of the credit grantors in South Africa are also members of the CPA (Credit Providers Association). As members they have agreed to the time periods for which data should be displayed on a consumer's credit report.
The display period for a default is 1 or 2 years; for a judgment, 5 years. These periods are in line with the data retention periods prescribed by the NCA. This enables banks and stores to make informed risk decisions when deciding on whether to grant you credit.
- About managing Your debt
- What is the role of a debt counsellor?
- I can not pay my accounts. What do I do?
Debt management is an important skill for nearly everyone. Understanding your options for managing debt will help you stay in control of your debt.
You may not be not managing credit wisely if y ou are unable to pay your credit card and store card balances every month; your credit cards are maxed out so there is no cushion to cover emergency expenses; you buy everyday necessities like groceries on credit and you borrow money to pay your current debt.
What is the role of a debt counsellor?
A debt counsellor helps over-indebted consumers to restructure their debt. If you are unable to service the monthly repayments on your credit agreements, you can request the assistance of a debt counsellor to restructure your monthly repayments with your credit/service providers.
A debt counsellor can also assist you with basic financial planning skills, such as drawing up a budget. It is recommended that you only request assistance from a debt counsellor who is registered with the National Credit Regulator.
I can not pay my accounts. What do I do?
Do not ignore the problem and hope it goes away. It won't. The good thing about a negative credit report is that it can be fixed. Find out what is considered bad and good for your credit and how to recover from your credit mistakes.
Order your credit report and review it carefully. Make a list of your debts and prioritise them from most important to least important. Cut out all unnecessary expenses and use the extra cash to pay off your debts one by one. Negotiate or consolidate your debt by talking to your credit/service providers about a rate reduction.
Never ignore letters of demands or summonses to appear in court for non-payment. Phone the credit/service provider and try and adapt your repayment plan. Stick to your plan and be disciplined—do not spend what you can’t afford to repay and look at your Credit Report monthly to track your improvement.
- What is an administration order?
- What is a judgment?
- What is a rescinded judgment?
- What is default data?
- What are legal notices?
What is an administration order?
If you find yourself unable to manage your debt, you may apply for an administration order in the Magistrates Court if your debt does not exceed R50 000. The magistrate examines your financial position and appoints an administrator to whom you make regular payments.
These payments are divided proportionately among the various stores and banks to which you may owe money. An administration order remains on your credit report for a period of 10 years or until it has been rescinded.
A judgment is granted when a court orders that you make payment on your debt. A legal process is followed before a judgment is issued. A summons is issued to the individual—note that legally the summons does not have to be issued to the individual in person, but can be issued to the individual’s home address. The summons informs you of the court appearance and allows you to represent yourself. If you fail to appear in court, the judgment is issued. The judgment is held on the credit bureau system for five years or until paid in full.
When a judgment has been granted against an individual in error, or when other irregularities have occurred, or if the credit/service provider agrees to the rescission, judgment could be rescinded and removed from the consumer's credit report.
Default data is information supplied to a credit bureau by the credit grantors that relates to late payment or non-payment on accounts. Different retention periods apply for different types of defaults.
Classifications such as 'delinquent', 'default', 'slow paying', 'absconded' or 'not contactable' are recorded on your credit report for 1 year.
Classifications related to enforcement action taken by the credit provider, including classifications such as handed over for collection or recovery, legal action, or write-off are recorded on your credit report for 2 years.
A notice is a legal action that has been taken against you after you have failed to pay a debt or outstanding account. Notices include administration orders, provisional sequestrations, sequestrations and rehabilitation orders. Administration orders remain on your profile for 10 years, rehabilitation orders remain for 5 years and sequestrations remain for 5 years if no rehabilitation order is granted.
- How to log a dispute or query
- What is classified as a dispute?
- What is classified as a query?
- How do I log a dispute with TransUnion?
- How does TransUnion investigate my dispute?
Is there information that you feel may be inaccurate on your report or do you disagree with certain information on the report? Find out how to ensure your credit report is consistent and contains only the information that pertains to you.
Our goal is to maintain accurate information on your TransUnion credit report. If you do not recognise information on your credit report, or believe an item may be inaccurate, you may request an investigation. Only inaccurate information may be removed; negative information that is accurate will stay on your credit report per the required legal retention periods.</>
You can log a dispute or query with TransUnion on 0861 886 466. TransUnion recommends that you do not apply for credit while a dispute is pending. Investigations are typically concluded within 20 business days of the date we receive your request. TransUnion contacts the credit/service provider that reported the information and ask them to provide credible evidence to support the information in question. Please provide all substantiating and required documentation when you submit a dispute.
Be very careful of so-called 'credit repair agents' who claim to be able to remove valid listings for an upfront fee. This practice is illegal, and you could end up losing your money or paying for a service that you could have done yourself.
What is classified as a dispute?
A dispute is a challenge to the accuracy (correctness) of credit information appearing on your credit report. If information on your credit report does not appear to be factually correct in all details, you can log a dispute with TransUnion. If the information appearing on your credit report is factually correct in all details, but needs to be updated in light of a subsequent event which is not reflected, this is not a challenge based on the accuracy of the information. It is considered an update and will be dealt with as a query.
The following are categories of disputes:
- Factually incorrect: The information on your credit record is factually incorrect (for example, the listing on your credit report does not belong to you). This may include any court record, default, payment profile line, or trace alert. Another example is that you did not apply for debt counseling, but your credit report is updated with a debt counseling indicator.
- Fraud: Someone applied for credit fraudulently in your name and you are now listed for the debt. To assist you with this type of dispute we require you to provide us with a completed dispute form, an affidavit and FICA documentation.
- Outdated information: The information on your profile is outdated—that is, the data retention period that bureaus follow in retaining certain information on your credit report has expired, but the data still appears on your profile.
What is classified as a query?
A query relates to the content of information on your credit report and is not a challenge to the accuracy of information on your credit report.
The following are examples of queries that you can log with TransUnion:
- Personal Information update: Updating your personal information on your credit record (for example, your name, address, employer and ID number). To update your personal information we require you to provide us with the relevant, verified information to substantiate your query. Others: Any updates relating to debt counseling indicators, rescission order, rehabilitation and other court related information (for example, the amount and reason for judgments).
How do I log a dispute with TransUnion?
Call us on 0861 482 482 to request that a dispute form be forwarded to you to complete. It is also recommended that you obtain your credit report to substantiate the concern on which you are raising the dispute/query. You will be required to complete and return the dispute form together with the required FICA (Financial Intelligence Centre Act) documents. Your FICA documentation includes a copy of your ID book and a copy of any one of the following documents for verification - Electricity or store account statement; Lease agreement; Letter from a tribal chief or civic organisation; Letter from your parents if you are living with your parents; Letter from your employee. (less than 3 months old).
Submit your dispute form as well as any documentation to substantiate your dispute or query, together with a verified copy of your ID and proof of residence. On receipt of the dispute form and supporting documentation, TransUnion will provide you with a reference number. If your query is within our jurisdiction, we will launch an investigation.
How does TransUnion investigate my dispute?
TransUnion will initiate an investigation as soon as all your documentation is received to substantiate your dispute or query. Investigations are typically concluded within 20 business days. We contact the data provider that reported the information and ask the credit/service provider to provide credible evidence to support the listing in question. We document the outcome of the investigation and make any necessary changes to your credit report. Once your investigation has been completed, we notify you of the outcome of your dispute.
If your query is within our jurisdiction, we will launch an investigation free of charge. Allow a maximum of 20 working days from the date that we receive your completed form and accompanying documentations for us to resolve your query.
- What is a credit score?
- What number band indicates if my TransUnion Credit Score is good or bad?
- What is the difference between the TransUnion Credit Score and the score used by lenders?
- What are the main factors that impact my TransUnion Credit Score?
It is a 3 digit number that is created by TransUnion representing your overall credit behavior. It includes score ranges that will help you understand your score.
A consumer credit report will be updated with new information provided over time by credit/service providers. Your TransUnion Credit Score is calculated based on the latest information contained in a credit report at the time the score is requested, so a score generated a month ago will probably be the same as one calculated today.
What number band indicates if my TransUnion Credit Score is good or bad?
The TransUnion credit score bands are 0-615 (Poor): 615-729 (Fair); 730-821 (Good); 822-917 (Very Good); 918-999 (Excellent).
What is the difference between the TransUnion Credit Score and the score used by lenders?
As per the National Credit Act a credit or service provider may determine for itself any scoring or other evaluative mechanism or model to be used. This means that the TransUnion Credit Score is not the same score that lenders will use to decide if you qualify for credit or a loan.
A credit risk score used by lenders will include not only the credit information held by a credit bureau, but elements requested when an affordability assessment is done, for example your income and expenses, your demographic information, current and past relationship with the lender, collateral etc.
What are the main factors that impact my TransUnion Credit Score?
- Too much debt: Having too much available credit can sometimes harm your credit score. Credit or service providers may feel that you have the ability to spend more than you could potentially pay back. You might want to consider closing a few accounts or asking to have your credit limits reduced.
- Your account balances are too high. High levels of debt can signal to potential credit or service providers that you are spending more than you can afford. It is a good idea to use your credit cards regularly but remember to keep your balances below 35 percent of your available credit limit. If you have balances above 35-50 percent, you could see your credit score start to drop.
- Late Payments: Late payments will drop your score. In other words a 90 day late payment is more damaging than 30 days late. Always pay at least the minimum amount on your credit account each month.
- Too many new accounts: Looking for new credit can equate with higher risk if the enquiries are done across many different industries within a short period of time. Opening several credit accounts in a short period of time affects your TransUnion score. The impact from applying for credit will vary from person to person based on their unique credit histories.
- Public Record information. Bankruptcies and judgments on your credit report are items of public record that indicate that you did not honour a particular debt obligation. In some cases, such as judgments, it also indicates that the credit or service provider took legal action against you in an attempt to collect the debt. An item in this category will significantly lower your score. Payment of these types of items will not immediately undo the damage to your credit score.