Most people know about credit and its uses, but few know and understand the intricacies of their credit report. This regularly updated, credit bureau-created record of your debt repayment is arguably one of the most important financial documents of your life; banks and other financial institutions use it to determine whether you are a good credit risk; in other words, whether you can repay your loans on time and with interest.
If you need to sort out your debt, or just streamline your finances and repayments, your credit report can be a useful tool. You are entitled to two free reports a year, but before you order them, you first need to understand each section:
- Identifying information:
This section lists your name, birth date, past and current address, employment information and ID number. Updates come from data you supply lenders.
- Public records:
Here you will find information relating to foreclosures, wage attachments, judgments and bankruptcies.
- Payment profile information
This is the history of your credit repayment behaviour; all the accounts you ever had are listed and referred to as ‘lines’. Each line includes the creditor’s name and account number, the total loan amount, how much you still owe and how well you have paid, as well as other relevant data.
- Enquires
This is a list of everyone who has asked to see your credit report. Try to keep enquiries to a minimum, because too many give the impression that you are being financially irresponsible by ‘shopping’ for credit.
Once you have a copy of your credit report, review it for errors and judgments. Errors can be resolved quickly if reported to the bureau concerned, but a judgment means that you have not paid a debt and the creditor has gone to court for legal support. However, once the debt is repaid in full, the financial institution involved must remove the judgment.
If your credit record doesn’t look as stable as it should, or if you need help with repayments, don’t be afraid to approach your bank for assistance. Our professional, experienced debt counsellors will work out a plan to best suit your situation.
For more information, visit http://www.standardbank.co.za/standardbank/About-Us/Financial-Education/Credit-Health