CREDIT BUREAUS IN SOUTH AFRICA

The National Credit Act 34/2005 requires the National Credit Regulator to register and regulate credit bureaus.

Credit bureaus play a vital role in your borrowing life. They serve as your reputation in a world where the credit provider doesn’t know you.

The credit bureau is like a warehouse of information about your past. When a consumer borrows money – with a car loan or credit card, for example – the provider of that credit reports back to the credit bureaus on the exact payment behaviour of such a consumer. Credit bureaus also collect information from other sources such as public records. The National Credit Act states what information may be kept by the credit bureau, who may send information to the bureaus, who may get the information from the bureaus, and for how long the bureaus may keep the information. A consumer’s information may be personal information or credit information.

The consumer’s credit information stored at credit bureaus

The information includes almost all the consumer’s information such as:

A person’s credit history
  • Credit agreements signed
  • Repayment history
  • Type of loan
  • Date opened
  • Date of last activity
  • Account status
  • Amount past due
  • Minimum payment due
  • Amount of your last payment
A person’s financial history
  • Past and current income
  • Assets and liabilities
A person’s personal history
  • Education, employment and career history
  • Id number
  • Name
  • Date of birth
  • Physical address
  • Marital status
  • Contact details

What information may be retained?

All the consumer’s credit information as listed before, as well as the following information:

  • Payment information regarding continuous services
  • Any information needed to identify credit card fraud
  • Information on payments made where the debt was ceded
  • Any other information, provided the consumer has given his permission for this information to be sent to the credit bureau, and provided the credit provider has informed the consumer what the information will be used for

What information may NOT be retained?

The NCA states that the following personnel information may not be kept by a credit bureau::

  • Race
  • Political connection
  • Medical status/history
  • Religion or though, belief or opinions
  • Sexual orientation
  • Membership of a trade union

Sources of credit bureau information

  • Credit providers
  • Consumers correcting wrong information
  • The government, a court or an employee of the court
  • A provider of continuous services
  • Insurance companies
  • Entities involved in investigating fraud
  • Educational institutions such as universities
  • Debt collectors
  • Other credit bureaus

The credit bureaus then provide this information in the form of a credit report to companies or persons that request it, such as lenders from whom you are seeking credit.

Removal of information and disputing incorrect information

A consumer has the right to challenge wrong information that is kept by the credit bureau. The consumer must inform the credit bureau that the information is wrong. On receipt of such notice from the consumer, the bureau must immediately cover/hide the information so that nobody can see it. The bureau then has 20 business days to obtain proof that the information is correct. If it cannot do so, then it must remove the information from their records.

If the bureau does obtain proof of the information, but the consumer still does not agree with it, the consumer may, within 20 business days, request the National Credit Regulator to investigate the matter.

Uses of credit information

The NCA states what the consumer’s credit information can be used for. It also states when a consumer’s consent is required for his/her credit information. Only the following uses are allowed:

Where a consumer’s consent is NOT required
  • Any purpose as required in the NCA, such as affordability assessments
  • Fraud or corruption investigations by SAPS
  • Fraud or corruption prevention services
  • Assessment of a debtor’s book where a consumer’s debt is cede to a third party
  • Obtaining a consumer’s details to pay out unclaimed pension funds or insurance claims
  • Tracing a consumer to collect debt due in respect of a credit agreement
  • Developing a scoring system
Where a consumer’s consent is required
  • Setting limits for the supply of goods or continuous services
  • Assessing an application for insurance
  • Verifying educational qualifications
  • Considering a candidate for employment

The process before listing information

Any person/entity allowed to submit information to a credit bureau must take all reasonable steps to make sure that the information submitted is correct. If a debt has prescribed, the credit provider is not allowed to send the information to the bureau.

Before a credit provider sends any adverse information to a credit bureau he/she must first give the consumer 20 business days notification of the fact that the information will be listed.

The consumer must also be informed of the information that will be listed to enable him/her to challenge the information if he/she believes it is wrong.