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Expert advice for a Fin24 user wants to set her credit record straight.
The user writes:
"I have paid off a long standing debt which has dented my credit record. I was unemployed for some time and could not make regular payments as required. I would like to clear my record and start on a new slate as I would now like to apply for a home loan.
"I have a stable job now and I am in a better financial space. I would like to know where I need to go to avoid falling prey to scams. Please help."
Renée Marais NCRDC1780 Independent Debt Counsellor advises:
It is important to get a copy of your ITC report and ensure that there are no judgments against your name. Those will have to be cleared first. All outstanding debt needs to be paid up and the judgment rescinded. If you have no judgments against your name then the next step is to pay off the arrears and request the creditors to update the system to reflect that you are up to date with payments.
Alternatively pay off all the outstanding debt in order to have a clean slate. Remember that your credit record is there for a reason and creditors are required to peruse it before extending credit. If creditors do not do that, they may be reckless in agreeing to a loan if the consumer has a less than satisfactory credit record.
If you do not have any outstanding debt and the creditor in question has not removed the listing from the ITC records you can register a dispute with the creditor and/or credit bureau or you can lodge a complaint in terms of section 136 on form 29 with the National Credit Regulator. Creditors are required to update the ITC records regularly and credit bureaus do abide by the law as set out in the National Credit Act.
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A dispute with ITC is usually resolved within 20 working days, the NCR may take longer. In short, the creditor must give you a letter to show that you have paid the debt, inform the credit bureau to remove the listing and you will be able to enter into any new credit agreement.
Please remember that the National Credit Act and Regulations has stricter rules for creditors when granting credit especially for something like a home loan or vehicle finance. They might not grant 100% loans but require deposit of perhaps 20%. This is normal in most countries and not designed to penalise consumers. It is the responsibility of the creditor to ensure that the person to whom they lend the money is in a good position to afford the credit.
You are welcome to contact a debt counsellor in your area to assist you in planning your budget and repayment of debt and assist in the future outcome to purchasing a home. Please make use of a registered debt counsellor and not a call centre agent. Find one on www.ncr.org.za.
*Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
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