Understanding a Credit Report

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H8rlequin

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Hi All!

So I come here in search of help in understanding credit reports.

Long story short, I recently left debt review voluntarily as I felt I could better repay my credit providers on my own, and I need access to credit again.

During my debt review (4 and a half years) I never missed a single payment, however when I look at my credit rating it's extremely low and most of my accounts show account days in arrears as 150+.... however all these accounts have received payment during this period, is this correct?

Also, I decided to settle up some of my accounts to try and improve my score, but it did exactly the opposite and actually reduced it even further... Do the credit bureaus see it as a negative when you settle accounts? Reports indicate C, which means closed.

Does anyone know what the minimum credit score is to get finance? I see a lot of companies saying "blacklisted" not welcome... But I know there is no such thing as a "blacklist" just low credit scores... how low is "too low" to receive credit?

Will making a bunch of short term little loans assist me in getting my credit rating back up? (Thinking like borrowing R100 from wonga over 4 days, pay it back, and the borrow it again)

Thanks in advance!
 
H8rlequin said:
Hi All!

So I come here in search of help in understanding credit reports.

Long story short, I recently left debt review voluntarily as I felt I could better repay my credit providers on my own, and I need access to credit again.

During my debt review (4 and a half years) I never missed a single payment, however when I look at my credit rating it's extremely low and most of my accounts show account days in arrears as 150+.... however all these accounts have received payment during this period, is this correct?

Also, I decided to settle up some of my accounts to try and improve my score, but it did exactly the opposite and actually reduced it even further... Do the credit bureaus see it as a negative when you settle accounts? Reports indicate C, which means closed.

Does anyone know what the minimum credit score is to get finance? I see a lot of companies saying "blacklisted" not welcome... But I know there is no such thing as a "blacklist" just low credit scores... how low is "too low" to receive credit?

Will making a bunch of short term little loans assist me in getting my credit rating back up? (Thinking like borrowing R100 from wonga over 4 days, pay it back, and the borrow it again)

Thanks in advance!
Click to expand...

There is a thing as Blacklisted:
Judgements and defaults listed on your profile (Blacklisted)
Your credit score is mainly used to ascertain the risk and couple an interest rate to the risk.
 
Thanks for the reply.

Sure, judgments etc would constitute being un-creditworthy... although it's not technically classed as being "blacklisted", but I understand what you mean.

I have no judgements or any negative remarks or anything, just a low credit score, but I am getting declined everywhere!
 
H8rlequin said:
Thanks for the reply.

Sure, judgments etc would constitute being un-creditworthy... although it's not technically classed as being "blacklisted", but I understand what you mean.

I have no judgements or any negative remarks or anything, just a low credit score, but I am getting declined everywhere!
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Are you sure the "under debt-review" has been removed entirely?
I can't see a low credit score holding you back from simple short term loans. I guess it depends on what you need credit for. For an Edgars account as an example I can't see you having ANY issues. Even a cellphone contract. Buying a house though, that might be a different story.
 
Well, you say closing the accounts are hurting you, maybe you should rather just settle the outstanding and then pay monthly, it will take a few months before your score starts improving, the more accounts in good standing (as opposed to closed) the better, will obviously take 24 months for the last of the bad debt to disappear from the reports.
 
Yup, been removed completely and it is in fact now illegal for it to be on any of my records as per the highcourt.

I am trying to finance a car (R130k) and my affordability is VERY VERY VERY good, with the repayment period being short (36 months) and the amount being less than 5% of my total salary...
 
Problem is that I require credit now. I crashed my car into a tree (cue the " I don't care " girls singing in the background) and I am literally at risk of losing my job since I won't be able to get to it.
 
H8rlequin said:
Problem is that I require credit now. I crashed my car into a tree (cue the " I don't care " girls singing in the background) and I am literally at risk of losing my job since I won't be able to get to it.
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And no insurance I guess? You face quite the conundrum. I don't think there is a shortcut, it's a long term process, except possibly someone else (who is willing to take the risk) buying a vehicle on your behalf.
 
H8rlequin said:
Problem is that I require credit now. I crashed my car into a tree (cue the " I don't care " girls singing in the background) and I am literally at risk of losing my job since I won't be able to get to it.
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supersunbird said:
And no insurance I guess? You face quite the conundrum. I don't think there is a shortcut, it's a long term process, except possibly someone else (who is willing to take the risk) buying a vehicle on your behalf.
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I think SSB is correct. Best advice is to get someone to sign surety. Maybe your dad, mother, brother someone who you trust implicitly. Alternatively let them finance the car you pay the instalment. This is your short term solution, then sort out your credit score.
 
Regularly taking those little loans will suggest to a future credit provider that you are incapable of managing your cashflow.
 
Agree with Pitbull.

If you need a car urgently, then rent one until you get the car. Based on what you claim to earn, it will be worth renting to ensure your job is secure.
 
diapason said:
Regularly taking those little loans will suggest to a future credit provider that you are incapable of managing your cashflow.
Click to expand...

+1 Never have I seen you build up a good credit record by borrowing money constantly.

A few "red flags" here (and it's going to sound like a lecture, but you're stuck in a circle of debt):

If your job is so important to you, why the hell drive around with no car insurance? This is borderline irresponsible considering you NEED it for your job and you yourself said, facing to get sacked because of it. Do you pay your rent each month? Or do you squat and not pay because you feel you don't need a roof over your head?

Now you need access to credit again to pay for something that could have been covered. A never ending cycle and it won't get you anywhere. Trust me.

When you go through debt review, you pay your debt via the debt review company, this causes delays in updating your credit record usually. If you settled some accounts, great, but your score overall will stay low because you've exhibited previous behavior of non-payment. No amount of borrowing/repaying money (which will cost you upwards of 40% in interest btw, so bad idea from the get-go) will raise that. Only behavior of being a good, consistent payer will raise that score and show you as a less risk client.

However, as I mentioned above, and in a "i am lecturing you" tone, I don't think you are ready to handle your own money and think it is a big mistake that you left debt review for the purpose of incurring more debt just because you were too short-sighted to cover the BASICS to ensure EMPLOYMENT.

No car No Employment = No Salary = No paying back Creditors = You are screwed.

I myself struggled for over 10 years to pay off any and all debt and managed to do so without going into debt review and without losing my job when I had a car crash or when my geyser leaked and destroyed half the place I was living in. Insurance. Sure you will "save" yourself maybe R600 a month but good lord does it save your ass when you cannot afford to have accidents! Especially when random trees jump infront of you over the festive (drinking) period.
 
Hey, thanks for your feedback but you are assuming a lot.

With regards to my car, it was paid for, in cash, which I saved up for for a long time. It had full comprehensive insurance which paid out R16 000 when the car was written off (I paid R50K for the car, so it was a big loss to me). Sadly it's nearly impossible to buy another car that drives for R16 000, hence my requirement for another one (the R16k will be used as deposit). This accident happened 6 months ago, while on my way to work... and it was not my fault (but I digress)

With regards to my "reckless spending and behavior" the only reason I ever went under debt review was because I was retrenched and was without a job for an extended period of time. At the time it seemed like the only way out. Knowing what I know now I would never have gone under debt review, but hindsight being 20/20 and such....

My behavior of paying has been excellent... like I said, not a single missed or even delayed payment for 4 and a half years... I have already finished up more than 70% of my debt commitments and by leaving debt review I even increased my payments, and settled even more accounts... So please don't tell me I don't know how to work with my own money.

My questions are simple, and your lecturing is honestly not doing anything to answer them.

Thanks for the other feedback however.
 
H8rlequin said:
Hey, thanks for your feedback but you are assuming a lot.

With regards to my car, it was paid for, in cash, which I saved up for for a long time. It had full comprehensive insurance which paid out R16 000 when the car was written off (I paid R50K for the car, so it was a big loss to me). Sadly it's nearly impossible to buy another car that drives for R16 000, hence my requirement for another one (the R16k will be used as deposit). This accident happened 6 months ago, while on my way to work... and it was not my fault (but I digress)

With regards to my "reckless spending and behavior" the only reason I ever went under debt review was because I was retrenched and was without a job for an extended period of time. At the time it seemed like the only way out. Knowing what I know now I would never have gone under debt review, but hindsight being 20/20 and such....

My behavior of paying has been excellent... like I said, not a single missed or even delayed payment for 4 and a half years... I have already finished up more than 70% of my debt commitments and by leaving debt review I even increased my payments, and settled even more accounts... So please don't tell me I don't know how to work with my own money.

My questions are simple, and your lecturing is honestly not doing anything to answer them.

Thanks for the other feedback however.
Click to expand...

The best advice I can give you is to request a credit report from Transunion. You are entitled to one free report a year. There could be various reasons why you keep getting declined. Here are some factors which could be the reason for the decline:

1. Credit score is be below 620 ( 620 is usually the normal score )
2. Judgements and defaults
3. History of business rescue - (This puts you at high risk according to the banks)
4. Worst payment status - If you have any accounts which show that you were more than 30 days+ in arrears, this will negatively affect your credit record.
5. Micro loans - this is a big one. Banks hate consumers taking micro loans. Despite the fact that you may be paying these on a monthly basis, having micro loans negatively impacts your score, as most consumers with micro loans default at some stage. The same can be said for personal loans, which also lower your score. However, having one personal loan should not make much of a difference.
6. Number of enquiries - Believe it or not, every time you apply for a finance quote, it lowers your score. Banks don't like to see that you have recently applied at 10 different places for finance. They will look at it and say " He has applied at all banks, and still does not have an approval. I think we should decline the application".
7. Lack of debt - . This sounds crazy right? The reality is that someone with no accounts on record will always have a bad credit score. The reason being is that there is no track record of a repayment history. I've seen people with an income of over R100,000 a month get declined for a bond repayment of 10k, because they have never had a single debt on their name.

I hope this helps you to understand the reason for the decline, and that you request a report. I will be happy dissect the report for you if you like. You can just block out all the names and addresses. Good Luck!
 
A few tips for getting a good credit score:

1. Make good debt as soon as possible - Credit card, bond and vehicle finance. Always pay more than the minimum amount on a credit card, bond and vehicle finance. For example, if your car payment is R4500 a month, ask the bank to debit you with R5000 a month from month 2. This means you will pay off the vehicle before the end of the term, and is a bit of a buffer as well. This will greatly increase your record. Do the same with your bond and try keep your credit card clean. A credit card and the repayment history of it is often a huge factor of a credit record.
2. Obtain a free credit report from Transunion once a year and understand it.
3. Try and avoid micro loans at all costs!!! A personal loan is ok, if you only have one.
4. Having property on record increases your credit score and chances of other finance (eg, business loans) .
Never ever sign surety for anyone!!!!!!!

These are just a few tips. I am too lazy to type out the rest. :D
 
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Supplementary info:

supersunbird said:
Can get your free (or paid-for reports with scoring) from the below websites:

Transunion (have to pay for scoring, free report doesn't have scoring):
https://mytransunion.co.za/

Experian (free report has scoring):
https://www.creditexpert.co.za/

XDS (free report has scoring):
http://www.credit4life.co.za/

Compuscan (have to pay for scoring, free report doesn't have scoring):
https://www.mycreditcheck.co.za/

For a paid credit report that checks XDS, Transunion and Experian at R79 you can go to any Checkers or Shoprite MoneyMarket counter or you can do it online:
http://www.kudough.co.za/shoprite_partner.aspx

For a paid credit report that uses all 4 the credit bureaus mentioned you can use the below link to buy it online for R99:
https://www.credithealth.co.za/complete-credit-report.htm
Click to expand...
 
What is the scoring portion of a credit report?
 
Hi All thanks for the comments.

Turns out it's my arrears on some accounts which are bringing me down. I did not think it had such a big impact, so I will have to get them up to date first. Will rent a car in the interim.

O well....
 
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