Reasons why the loan was declined – What you need to know about credit records
Credit bureaus are often the first stop for many lenders when deciding whether to grant an individual credit or not. These institutions are responsible for collecting and monitoring consumer and company credit data relevant to a person or company’s lending history and habits. Consumer credit activities are monitored and recorded and are reflected as credit records.
What is the ITC?
Whenever you apply for credit from a bank or financial institution, they run an ITC check as part of the application process.
ITC is the former name of TransUnion – one of South Africa’s biggest credit bureaus. The name is common to many South Africans because for a long time it was the only credit bureau that was operating in the country.
Your credit report displays what debt you have incurred over the past 24 months and if there have been any critical changes to your credit profile. These changes may include negative listings such as a late payment to your account or non-payment, which could lead to a judgement against you.
The credit information reflected in the credit bureau reflects how well or badly the consumer pays their accounts.
The National Credit Regulator in South Africa has made it possible for each consumer to obtain a free credit record once every 12 months from each credit bureau. Should the information on the report be inaccurate, consumers have the right to contact the credit bureau in order to have this rectified.
If you have a less-than-perfect credit score, this may make it more challenging to access credit. In order to clear your credit record, you’ll have to pay off any debts you may have and get the judgements removed from your record. A credit score ranges between 300 and 850.
A credit score of below 620 is considered bad or poor credit. Having a credit score of 500 is likely to mean that your financial options are limited and the interest rates you will be charged will be higher.
It’s important to make all payments on time for 24 months to ensure clean credit records.