How companies lock you out of loans even after you've paid up
According to the law, providers have just seven business days to update credit bureaus. But with patchy compliance, people who have rehabilitated their finances remain locked out.
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Been turned down for a loan or a cellphone contract despite sorting out your old debts? The problem might not be you.
Your credit profile could be stuck in the past because companies aren't playing by the rules.
Many credit providers are failing to update customer information, leaving millions with outdated credit reports that unfairly block them from financial services. The issue hits hardest when you're trying to get back on your feet.
You settle a court judgment or finally pay off a defaulted account, but that positive step never makes it onto your credit record because the company you paid doesn't report it.
"We still have some entities that do not comply in terms of submitting and updating data, and this unfortunately leads to inaccurate and outdated consumer payment profiles, which unfairly denies access to credit and other financial services for qualifying consumers," said Magauta Mphahlele, executive director of the South African Credit and Risk Reporting Association.
By law, providers have just seven business days to update credit bureaus. But with patchy compliance, people who have rehabilitated their finances remain locked out.
"The updating of data is also important to allow consumers who have rehabilitated themselves to re-enter the market," Mphahlele explained.
The scale of the underlying debt problem is massive.
Statistics South Africa figures show magistrates' courts sent out a staggering 34 978 debt summonses in July alone, more than 1 100 every day, with courts ordering payment on R359.8 million worth of debts.
The National Credit Regulator (NCR) is working with the International Finance Corporation on a project to clean up credit information. The plan is to bring in more alternative data, boost reporting for small businesses, and make the whole system more transparent.
Check your credit report regularly.
If you spot a mistake, like an old debt marked as unpaid, dispute it directly with the credit bureau. If it's not fixed within 21 business days, escalate the complaint to the National Financial Ombud Scheme.
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