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
Payment holidays from the banks - can they be trusted?

Payment holidays from the banks - can they be trusted?

Consumer Ninja, Wendy Knowler, on payment holidays from banks in which you get a break from interest and repayment of debt.

When the coronavirus default tsunami hits,  how will banks respond?

When the coronavirus default tsunami hits, how will banks respond?

This edition of Consumer Corner looks at how lay-offs, closures and quarantine will impact people's income and ability to repay debt.

 Sudden cancellation of life and illness policies -  consumer warrior advice

Sudden cancellation of life and illness policies - consumer warrior advice

Wendy Knowler, consumer Ninja, has a horror story about insurance policies being cancelled - by sms.

Telkom directory used to dupe small business owners

Telkom directory used to dupe small business owners

Hundreds of small businesses which fell prey to a phone directory listings scam, should relax and read here.

Wait - why did that debit order go off so early?

Wait - why did that debit order go off so early?

Wendy Knowler, consumer journalist, on Nedbank's early debit orders.

Read your documents before you sign the deal on your car or house!

Read your documents before you sign the deal on your car or house!

Wendy Knowler, consumer journalist, on the importance of carefully reading your documents when you buy assets.

Popular articles
COVID-19 death toll rises to 18 in SA, cases at 1,845

COVID-19 death toll rises to 18 in SA, cases at 1,845

In a statement released on Wednesday night, the minister said the cases had gone up to 1,845.

Lockdown: Companies with good service on social media - and those without

Lockdown: Companies with good service on social media - and those without

Consumer journalist Wendy Knowler investigates which companies are meeting their customers’ needs on social media.

How to support outdoor entertainment indoors

How to support outdoor entertainment indoors

Theatres across the world have gone dark, but you can still support and watch the arts while at home

How did a single Netcare hospital become the epicentre of Covid-19 in KZN?

How did a single Netcare hospital become the epicentre of Covid-19 in KZN?

Bruce Whitfield interviews Richard Friedland, CEO at Netcare – owner of the hospital at the epicentre of KZN’s Covid-19 outbreak.

Expect no price hikes or shortages (except rice, pasta) from us - Tiger Brands

Expect no price hikes or shortages (except rice, pasta) from us - Tiger Brands

Tiger Brands CEO Noel Doyle assures South Africans that there are sufficient supplies of most of the company's products.

Dis-Chem launches drive-through COVID-19 testing sites

Dis-Chem launches drive-through COVID-19 testing sites

The company says the tests will cost R850 each and it may take 24 to 48 hours to get your results back.

#COVID-19: Old Mutual offers 4bn worth of free life cover to health workers

#COVID-19: Old Mutual offers 4bn worth of free life cover to health workers

The company is making it available to approximately 430,000 registered healthcare workers on the front-line of the pandemic.

Lockdown shelters in Tshwane helping reunite the homeless with their families

Lockdown shelters in Tshwane helping reunite the homeless with their families

Joanne Joseph speaks to City of Tshwane administrator spokesperson Omogolo Taunyane- Mnguni to find out more.

Only fruit and veg, fresh meat, grocery, spaza shop permits to be issued - Cogta

Only fruit and veg, fresh meat, grocery, spaza shop permits to be issued - Cogta

Deputy Minister Obed Bapela says permits fro cooked food will not be issued as well as furniture shots.

Savanna Virtual Comedy Bar launches on Thursday, featuring comedic heavyweights

Savanna Virtual Comedy Bar launches on Thursday, featuring comedic heavyweights

Bruce Whitfield and comedian John Vlismas share a few Covid-19 jokes and discuss the launch of the virtual comedy club.