According to the Credit Bureau Monitor's most recent report, there were 8,8m SA consumers with impaired credit records in the second quarter of this year - over 174 000 more than in the first quarter...

This took the percentage of credit-active consumers with impaired records to a total of 46,7%, with 18,5% being three months or more in arrears, 13,9% having adverse listings and 14,3% having judgments and administration orders against them.

And yet, according to a recent poll conducted by bond originator ooba, 69% of SA consumers don't know what their current credit status is - a very worrying situation, according to ooba's property finance processing manager Kay Geldenhuys, because it means that many people with impaired records are not even aware that they are on a "blacklist".

Many may be there only as a result of a minor violation, she says, but the result when applying for credit is often just the same for a negative credit rating as an adverse listing - a firm no from the credit provider. "When providing credit to consumers, banks obviously want to be sure that their investment in you is safe.

The riskier the investment, the less likely that banks will approve financing, including home loans. Indeed, one of the main reasons bond applications are declined is because of the applicant's negative credit profile.

"It is therefore imperative for potential homeowners to be aware of their current credit profile at all times. And to optimise your chance of securing your desired home loan, you should make sure you have a clean credit record by ensuring that all of your accounts have been paid up to date before you apply," says Geldenhuys.

She says that potential home owners should seriously consider prequalification as an option when shopping around for a home. "This ensures that the applicants' credit profile and affordability is checked upfront. Buyers also get a clear view of their budget range and can house hunt accordingly.

"Most retail stores and banks' default listings will remain on a consumer's credit profile for two years. If you do choose to close an account, settle the account balance and then contact the relevant credit provider to check that your name and record has been cleared. If you have a judgment on record, clear the account and then contact a litigation attorney to have the judgment rescinded."

Geldenhuys says in that in order to keep a healthy credit score, consumers should also follow these guidelines:
-      Activate a profile with the TransUnion ITC or Experian as this will allow you to check your credit record 24/7.        (http://www.transunion.co.za/home.html; http://www.experian.co.za/)
-      Obtain at least two credit reports of your profile on an annual basis.
-      Ensure that you meet your monthly debt repayments on time. Even a payment that is only 24 hours late can be bad for your rating.
-      Always pay the minimum instalment required on all acounts.

Distributed by The Mega/ Press Network
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