Watch your credit, urges watchdog

Cape Town - The National Credit Regulator (NCR) urged consumers to monitor their credit health and approach their debt counsellors and credit providers for assistance.

Nomsa Motshegare, NCR CEO announced on Tuesday that consumers' credit health deteriorated in the quarter ended June 2013.

The number of credit active consumers increased to 20.08 million from 19.97 million in the previous quarter. Consumers classified in good standing decreased by 76 000 to 10.55 million.

The most alarming figure comes from consumers with impaired credit records. There has been an increase of 189 000 to 9.53 million from 9.34 million in the previous quarter. 

Motshegare said the increase in the levels of impairment was of concern.

The number of impaired accounts increased from 17.52 million to 18.31 million when compared to the previous quarter.

This is clear evidence that increasingly more South Africans are struggling to cope with their debt. With increases in petrol prices and electricity tariffs on the cards, more South Africans will soon find themselves drowning in debt.
 
A total of 394.47 million inquiries were made on consumer credit records. It marked an increase of 16.3% quarter-on-quarter and 27.1% year-on-year. Inquiries initiated by consumers accounted for 15.26 million of all inquiries, a decrease of 11.2% quarter-on-quarter and an increase of 13.9% year-on-year.

Of the total inquiries made on consumer records, inquiries from banks and other financial institutions accounted for 83.3%.

Banks and other financial institutions’ enquiries increased by 15.2% from the previous quarter, retailers increased by 20.5% and telecommunication providers decreased by 10.7%.

The number of credit reports issued to consumers decreased to 145 720. This seems to indicate that many consumers remain unaware of what their true financial standing is.

Every South African is entitled to one free credit profile from each credit bureau every year. Of the total credit reports issued, 83.5% (121 659) were issued without charge and the remaining 16.5% (24 061) were issued with charge.

There were 16 868 disputes lodged on information held on consumer credit records for the quarter ended March 2013, an increase of 3.1% quarter-on-quarter and 62.9% year-on-year. 

 - Fin24