Only 2.5% of the 26.6-million credit-active consumers approached the credit bureau for reports.
Many of these consumers only inquired about this after being declined loans.
The National Credit Regulator has reported that only 667,674 credit reports were issued to consumers by the different registered credit bureau in the previous 12 months, despite the country having almost 27-million credit active consumers.
According to the office of the national Credit Ombudsman, many indebted and desperate consumers often fall prey to scammers after they have realised that the dark spots on their credit score information were hindering their chances of securing a loan or credit.
Out of desperation, they seek a quick fix that sometimes sinks them deeper into trouble.
“It is generally only when consumers have been declined credit for a home loan, personal loan, store account or a new car; among others, that the credit report is checked. It is then that consumers are alerted to some information on the credit report being negative. It is during these times that consumers have been conned,” said ombudsman Howard Gabriels.
“The Credit Ombud contact centre has heard many complaints from despairing and disgruntled consumers about being misled by credit repair specialists. These credit repair specialists promise that for a fee, they can ‘erase your bad credit’ or to ‘get you off the blacklist’ or even to ‘remove judgments, listings, debt review indicators’ from your credit report.
"Advertisements such as these appeal to consumers with poor credit history. Consumers are enticed into believing that the credit repair specialists can clean credit reports and improve credit scores without the outstanding debt being paid," explained Gabriels.
A credit record is a crucial piece of document that allows creditors to access your financial behaviour and reputation.
Fiona Ssemanda from DirectAxis, a financial services provider, said: “It is more influential than any other reference you can provide and should therefore be checked regularly.”
She explained that your credit report can determine whether you qualify for a home loan, vehicle finance or other forms of credit.
It also determines what interest rate you will pay, if a landlord will consider you a suitable tenant and that a potential employer can check your financial behaviour.
“Your credit score affects more aspects of your life than most people realise. From banks to cellphone companies, everyone bases their decision about how much of a risk you are on your credit score.
“The National Credit Act (NCA) sets out that every 12 months, you may request your credit report from the credit bureau at no cost. If you want your credit report again within the 12 months, you may be required to pay a minimal fee.
“South Africans are either unaware or careless of this significant right afforded to them in terms of the NCA,” said Gabriels.
The Ombudsman warns consumers to be warry of credit repair specialists who want you to pay upfront fees for their services or those who do not tell you of your legal rights and what you can do for yourself for free.
Also run away from specialists who ask you not to contact the credit bureau directly. "You can challenge the information on your credit report with the credit bureau by lodging a dispute. You do not pay the credit bureau to challenge the information and to correct your credit profile.
“The credit bureau will investigate your dispute and provide you with the outcome within 20 business days. Should the 20 business days have expired, and your dispute remains unresolved, or you are dissatisfied with the outcome, you can lodge a complaint with our office,” said Gabriels.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.