ConsumerTalk with Wendy Knowler

Always ask why your credit application was rejected (and other useful tips)

South Africans have a right to be told why their credit applications have been turned down, advises consumer journalist Wendy Knowler.

While credit providers such as banks, cellphone companies and retail outlets have the right to reject a credit application, they have to offer reasons as to why.

I don't think many South Africans realise that you don't just have to accept a rejected credit application.

Wendy Knowler, consumer journalist

They are legally obliged to tell you the reasons if you ask. In most cases they won't tell you if you don't ask.

Wendy Knowler, consumer journalist

In terms of the National Credit Act (NCA), Knowler says consumers have the right to be provided with the reasons why their application was declined.

Credit applications are often rejected because applicants don't meet the criteria of creditworthiness or due to an adverse listing on your credit record, she says.

A rejected credit applications is a red flag for a consumer to investigate their credit record for any fraudulent activity against their name.

Less than 5% of South Africans regularly check their credit records... 70% of those who lodge a complaint about an unjustified adverse listing have them removed.

Wendy Knowler, consumer journalist

WHERE TO CHECK YOUR CREDIT RECORD FOR FREE

The NCA entitles you to one free credit record check a year, with each bureau. Here are the contact details of four major credit bureaus:

  • TransUnion: www.mytransunion.co.za, 0861 886 466

  • Experian: www.experian.co.za, 0861 105 665

  • XDS: www.xds.co.za (011) 645 9100

  • Compuscan: www.compuscan.co.za 0861 51 41 31

Adverse listing on your credit record?

If you disagree with a listing you can lodge a dispute with the credit bureau. If, after 20 days, the adverse listing remains, you may approach the Credit Ombud for help.

Call 0861 662 837, e-mail Ombud@creditombud.org.za or sending an SMS to 44786 and they will call you back.

South Africans also have the right to request a quotation from the potential lenders they consult.

The NCA calls it a “pre-agreement” statement and quote. The quotation shows the borrowed amount, deposit payable, if applicable, interest charged, period of repayment, date of first installment, date of last installment, as well as extra charges such as initiation fees, monthly service fees and credit life insurance.

These quotations are valid for five business days, in terms of the act.

Requesting a quotation helps consumers weigh up their credit options without any obligation.

HOW YOUR CREDIT SCORE IS CALCULATED:

Our credit information, along with employment history, income, affordability assessments and the type of credit we apply for, is summarised on our credit profiles.

Each credit bureau calculates a credit score - a three-digit number - for every credit active consumer, using a complex formula that evaluates how you pay your bills, how much debt you carry and how all of that compares to other credit active consumers.

In effect, it reveals – in a single number – what your credit report says about your management of your existing credit.

Key factors which affect you credit score:

  • Account payment history: how you manage your accounts and whether or not you pay the entire installment amount on time.

  • Debt level: how much you owe and how much of your available credit you’re using.

  • Negative information: publicly available information in your credit record, such as bankruptcies and judgments, indicating you did not honour a particular debt obligation.

  • Length of credit history: how long each of your accounts has been open.

  • Account application and enquiry activity: how many account applications you submitted within a short period of time, and how many new accounts you opened.

Take a listen to the insightful discussion during Consumer Talk:

Every Wednesday, on The Pippa Hudson Show, Wendy Knowler provides useful insights and tips on how to make the most of your buying power.

For more stories visit the ConsumerTalk feature page.

Got a consumer case you need help resolving?

Email: consumer@knowler.co.za, put Cape Talk in the subject line, followed by the issue e.g. cellphone contract dispute.


This article first appeared on CapeTalk : Always ask why your credit application was rejected (and other useful tips)


Recommended

by NEWSROOM AI
Read More
You'll want to read your car tracker's terms and conditions after seeing this

You'll want to read your car tracker's terms and conditions after seeing this

Consumer journalist Wendy Knowler helps one concerned listener who discovered some worrying information about her car tracker.

Paying with a debit card? Don’t expect a refund on it when returning items

Paying with a debit card? Don’t expect a refund on it when returning items

Merchants are not allowed to process refunds on debit cards, warns consumer journalist Wendy Knowler.

Buying a used car: Warranties, service plans, avoiding a false sense of security

Buying a used car: Warranties, service plans, avoiding a false sense of security

The Money Show’s Brue Whitfield interviews consumer journalist Wendy Knowler.

How to buy a new car even if you don’t really have enough money for it

How to buy a new car even if you don’t really have enough money for it

South Africans are increasingly buying cars they can’t afford using balloon payments, says consumer journalist Wendy Knowler.

Why can't I get in touch with a customer support centre at UberEATS?

Why can't I get in touch with a customer support centre at UberEATS?

Consumer journalist Wendy Knowler follows up on your complaints in her weekly #ConsumerTalk segment.

Paying off your credit card every month to avoid interest? The banks are sneaky…

Paying off your credit card every month to avoid interest? The banks are sneaky…

Consumer journalist Wendy Knowler warns prudent credit card holders to keep tabs on their banks. In this case, it’s FNB.

Popular articles
Feeling tired of life and burnt-out? You may want to check this out

Feeling tired of life and burnt-out? You may want to check this out

Bruce Whitfield interviews Judy Klipin, author of “Recover from Burnout: Life Lessons to Regain your Passion and Purpose”.

'I get anxious when people talk to me about money'

'I get anxious when people talk to me about money'

Bruce Whitfield interviews comedian Anne Hirsch about her attitude to money (hopes and fears, successes and failures, etc.).

Benguela Global Fund Managers is buying Naspers, Standard Bank and Pick n Pay

Benguela Global Fund Managers is buying Naspers, Standard Bank and Pick n Pay

Zwelakhe Mnguni (CIO at Benguela Global Fund Managers) shares his stock picks of the week: Naspers, Standard Bank and Pick n Pay.

'Debt relief law may cause banks to stop lending to lower-income clients'

'Debt relief law may cause banks to stop lending to lower-income clients'

The Money Show’s Bruce Whitfield interviews Cas Coovadia, Managing Director at the Banking Association of South Africa.

[WATCH] Father and daughter dance-off changes tune when she starts twerking

[WATCH] Father and daughter dance-off changes tune when she starts twerking

Khabazela shares tweets and Facebook posts that have gone viral.

Gauteng Liquor Act prohibits passengers drinking in vehicles, says MMC Sun

Gauteng Liquor Act prohibits passengers drinking in vehicles, says MMC Sun

When you do take a taxi, drink at your destination and not in the cars, says City of Johannesburg MMC for Safety Micheal Sun.

Weighing up the cost and the benefit of a loyalty programme

Weighing up the cost and the benefit of a loyalty programme

Certified financial planner Paul Roelofse on choosing and unlocking the value of loyalty programmes.