Your credit rating score is something that is used to assess your financial history in order to determine whether you are suitable to lend money to. If you need finance your financial institution will grant you the money depending on whether you are a good or bad risk. If you are considered an acceptable risk, the amount will be loaned to you, but if you have been black listed, or have a bad credit rating this will negatively affect the chances that you will be lent money. Your rating is based on your perceived ability to pay back the loan amount.
If you want to know your credit rating score you should know that every South African is entitled to one free credit report per year, according to the South African National Credit regulator. This free report can be ordered in the month you were born in. Having a record of your financial history will assist you when you apply for a loan or want to buy property.
If this is the first time you want to access credit, your report is likely to say that you have very little credit history. If you have some history of credit problems, such as paying an account late, you will be classified as a slow payer. If you are aware that you may need to do this when your new loan is granted, you can apply for loan modification which will alter the way your repayments are made. This will mean you protect your credit history. This means that you are deemed a potential bad risk. The last option is that you are seen as very high risk, or have been blacklisted.
If you are worried that you are considered a bad risk or a slow payer, approach the South African National Credit regulator for your free report on your credit rating score.
A Financial Credit Report will Detail the History of your Debt
A financial credit report will detail the history of your debt and this allows you to pinpoint exactly where you went wrong if you have been blacklisted. Legally, the credit bureaus in South Africa are obliged to supply you with an annual credit report for your personal reference. However should you need a credit report urgently and you have already received the one from the credit bureaus then there are other avenues that you could investigate in order to obtain one. These credit reports are important as they provide objective information on your debt payment behaviour and therefore you can consider this report a form of reputational collateral. Having a good credit rating will help you secure a better interest rate on credit.
It is therefore important to request your reports as a financial credit report will detail the history of your debt. It is also important to check that the information on the reports is correct as should for any reason it be incorrect you may be denied credit. It is also extremely important to note that should you be denied credit for any reason, the credit provider is obliged to give you the reason as to why your request for credit has been rejected. Should you wish to dispute your report you are free to lodge a complaint directly with one of the three bureaus that you obtained the report from.
For those of you who are looking to start purchasing assets, or even just want to open a clothing store account, it is in the companies interest to investigate your credit history. As mentioned above should you be denied credit for any reason and you are not sure as to why you would not be eligible for credit then it is important to get your hands on your credit report from one of the credit bureaus as a financial credit report will details the history of your debt.