If you’ve been “blacklisted” with the credit bureaus for paying your bills late, failing to pay or due to a credit provider having taken judgment against you, that information lives on your credit report for a prescribed period. So, be wary of companies that offer to repair or clean your credit report. 

Negative information on your credit report adversely impacts your credit score, which is one of the factors that credit providers consider when deciding whether or not to extend credit to you, and the interest rate you will be charged.

• If any of your creditors has classified you as “delinquent”, “default”, “slow paying”, “absconded” or “not contactable”, this is recorded on your credit report for a year.

• If a creditor has taken enforcement action against you, including handing over your accounts to lawyers or debt collectors, or writing off debt, this stays on your credit report for a year.

• A debt judgment, debt administration order, provisional sequestration or sequestration order against you is more serious and remains on your profile for five years if no rehabilitation order is granted.

Avitha Nofal, a senior legal advisor at the office of the Credit Ombudsman, says in the case of a sequestration order, once the accounts that formed part of the sequestration have been settled, a rehabilitation order is granted by the court. This has the effect ending the sequestration and the sequestration notification is removed from your credit profile. 

If you have received a rehabilitation order, this stays on your profile for five years. She says this shouldn’t be viewed as detrimental to you because it shows prospective creditors that you’ve made good on your payment obligations. 

Nofal says that in terms of the National Credit Act (NCA), you have the right to lodge a dispute with a credit bureau when information on your credit report is inaccurate or out of date – at no cost to you. Once a dispute is lodged the credit bureau must investigate the accuracy of the information. 

The credit bureau would have to ask the credit/service provider that reported the disputed information to provide credible evidence to support the information in question. If the service provider can’t provide proof of accuracy, the bureau must remove the information.

Nofal says the Credit Ombud may investigate a complaint against a credit bureau or other member if: 

• 20 business days have expired [since you lodged the dispute] and the matter remains unresolved and/or you remain dissatisfied with the outcome; or 
• The credit bureau has reverted to you within the 20 business days with written feedback that the information is credible and therefore could not be amended.

On its website, credit bureau TransUnion warns consumers to “be very careful of so-called ‘credit repair agents’ who claim to be able to remove valid listings for an upfront fee. This practice is illegal, and you could end up losing your money or paying for a service that you could have done yourself”.

Nofal urges consumers to remain vigilant and cautious of offers to clear credit reports, especially if you have “adverse information that is factually correct”.

Information can only be updated or amended if it is incorrect. It can’t be amended at the discretion of an entity providing these services, she says.

Money asked Credit Clear, a company that says it can assist people with their blacklisting problems, what it charges for this and what it can do for consumers that they can’t do for themselves. After initially clarifying its practices, Credit Clear failed to answer these questions.

Nofal says some companies do offer such a service to consumers who don’t want the hassle of dealing with a credit bureau themselves. The National Consumer Commission would regulate the rendering of such a service. 

She says the Credit Ombud’s office sometimes finds that the information on the consumer’s credit report is incorrect, when for example an account was paid up but shows on the credit report as being in arrears.

Consumers should be aware that in the past if you had a default judgment against you, the credit bureaus would only update their records if you had obtained a rescission order. But since the NCA was amended, a paid-up letter is enough to remove judgment or default information.

Nofal says if a judgment remains unpaid, but the five-year retention period has been reached, the judgment should be removed from your profile but you’re still obliged to pay in terms of the judgment.  

She says consumers are also not made aware of the fact that to get the judgment removed, you need only pay the capital amount [outstanding]. If you still owe money to the collecting agent, this can’t be used as grounds to withhold the paid-up letter.