More debtors in difficulty
National Credit Regulator statistics show that consumers with good credit records have decreased since June 2007.
Of the 17,53million active consumers recorded at the end of September 2007, 59,5 percent showed a good credit-record standing compared to the 63,6 percent recorded in June 2007.
This is despite the increase in the number of credit-active consumers from 17,5million by end of September 2008 to 16,78million to June 2007.
Manie van Schalkwyk, credit information ombudsman, says: "This percentage might not seem significant, but what it actually means is that almost a million more consumers have impaired credit records and could not stick to their payment obligations. This is not good news for the industry."
Van Schalkwyk points to the recent economic slowdown as a contributing factors to the increase in consumers with impaired credit records.
"The effects of the economic slowdown saw interest rates increase constantly up to 5 percent from June 2006 to June 2008.
"This factor means that consumers have less disposable income, which could result in them not paying as per agreements, thus resulting in the increase on the impaired records," Van Schalkwyk says.
Fuel, food and everyday living expenses have also kept increasing and this put people under greater financial stress, he adds.
Van Schalkwyk says the report, compiled by credit bureaux and submitted quarterly to the credit regulator, may give an indication on where the regulator should focus its efforts .
"Consumer education should form the cornerstone in alleviating problems arising from credit transactions," he says.
Notify creditors of any difficulties, make other arrangements and stick to them. Telephone 0860-66-2837 or email firstname.lastname@example.org