Belinda Beresford
Perhaps it’s the scars of a wild youth, the aftermath of a delinquent spouse or the legacy of mismanagement of your money. But a bad credit record can have unpleasant repercussions, including failure to get a bond, credit card, store card, cellphone – all the trappings of a relatively affluent South African.
It’s unnervingly easy to get a bad record; roughly 15% to 20% of credit profiles contain negative information. You can have court judgments against your name without even realising it.
Rory Matthews of the credit bureau Experien says that a court summons simply has to be delivered to an individual’s last known address.
It doesn’t even have to be given to a person – it would be legally acceptable for the summons to be put under a stone by the front door without anyone in the house being informed.
For anyone beleaguered with a bad record, it can seem as though past financial mishaps are written in biblical letters of fire against one’s identity number.
But just as sins used to be downloaded on to a goat, and the hapless beast driven into the wilderness, past financial sins can be banished.
The easiest – and cheapest – way of rehabilitating a credit record is to let time heal the wounds. Some information held by credit-reference agencies should be routinely erased after a certain length of time.
Court judgments should be deleted after five years and defaults on retail account payments after three years. Liquidations and sequestrations take longer – it takes 10 years for the memory to be erased from databanks.
But there are faster ways of getting a clean financial bill of health – and of correcting any errors on a credit record. Even something as serious as a court judgment can be rescinded if the company which obtained judgment against you decides to be helpful.
Your first port of call should be the helpline of the credit agency which supplied the information.
The agency is obliged to provide you with your credit profile, although you may have to pay for the privilege of seeing information about yourself.
If the information is incorrect, the credit agency will generally only change it with the agreement of the company that provided the data in the first place.
So you have to contact the relevant organisation, which in turn has to contact the credit bureau.
And to make the situation more complicated, it’s possible that the information has been given to more than one credit agency. So getting the correction in writing and checking that the mistakes have been rectified would be a good idea.
If you’re tempted by those advertisements offering to clean up your credit record, remember it is possible to do it yourself, with some patience and negotiation.
Information Trust Corporation (ITC) says: “Consumers who have default notations on their credit profiles may contact the subscriber involved and make arrangements to pay the outstanding amount.
“The consumer may then request the subscriber to forward a written instruction to us in order to have the notation amended.”
To get a default court judgment revoked, you need to contact the company which took action against you, and this is where your negotiation skills come in.
You need to pay the outstanding amount in full, but also get the company to write a letter agreeing to rescind the judgment. Take this to the magistrate’s court where the judgment was given, pay a fee, and you’ve cleaned that black mark off your record.
Alternatively you can go to a credit repair agency. Often these will be run by lawyers who will do the negotiation on your behalf and make maximum use of the law to improve your status.
Sometimes such agencies can be slightly less than reputable, however. One Johannesburg-based private detective says he has heard of a couple of cases where people relied on bribery to fix their credit records.
The problem here is that if you hand over a lump of cash in return for an illegal activity, you have little legitimate recourse if the job is not done to your satisfaction.
The detective also said he had heard of cases where records would be altered for a few days – just enough time for applications for credit to be made.
Since credit reference agencies make their money by supplying accurate data, they are emphatic about controls being in place to prevent tampering.