Credit Education
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries, including South Africa. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this by providing an actionable view of consumers, stewarded with care.
Through our acquisitions and technology investments, we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk, and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good®—and it leads to economic opportunity, great experiences, and personal empowerment for millions of people around the world.
A credit bureau is an organisation that collects and maintains information on all credit-active individuals in South Africa. This includes credit reporting agencies like TransUnion. You’re considered credit active if you’ve taken out a line of credit — like a loan, store- or credit card — with a credit provider or have signed up for a service such as a mobile phone contract.
Credit bureaus collect both positive and negative information on your accounts, including your payment behaviour, which is documented and stored in your credit profile. Each month, data providers send updated information on credit and service agreements to the credit bureaus — which is then added to your credit profile.
At its core, credit refers to the ability to borrow money or access goods or services with the promise to pay later. When you borrow money, you typically agree to repay it with interest over time.
Having a basic understanding of credit is becoming increasingly important in today's world. In fact, many businesses, including insurance companies and some employers, now routinely review consumer credit information as part of their application processes. This means your credit standing can impact your ability to secure loans, insurance and even employment opportunities.
A credit report provides a snapshot of your credit activity and how lenders perceive your creditworthiness.
It typically includes information like:
- Credit Accounts: Active credit lines, such as loans, credit cards, and retail accounts.
- Payment History: A record of whether payments have been made on time or not.
- Credit Enquiries: Information on companies that have checked your credit in recent months.
- Credit Utilisation: The ratio of the credit you’re using versus your total available credit, which impacts your score.
- Outstanding Debt: Current balances and any overdue amounts on existing credit lines.
A credit report does not contain any data such as race, religious beliefs, political affiliations, or medical histories.
Credit report information is collected and updated by data providers, such as banks and other financial institutions, who submit updates on your credit profile to credit bureaus like TransUnion. The timing of these updates can vary between different data providers and credit bureaus, which may lead to slight differences in your credit reports and scores at any given time. Additionally, not all data providers report to every credit bureau, so the information on your credit report may differ depending on which bureau is being used.
TransUnion will only share your information as prescribed by the National Credit Act or with your consent, where applicable. By understanding who can view your credit report information, you can take steps to protect your privacy.
A credit/service provider is an entity, such as a store, bank, or other financial institution, that extends credit to consumers. This enables you to purchase goods or services on a "buy now, pay later" basis, allowing you to obtain what you need immediately and pay for it over time.
TransUnion does not make decisions to grant or deny credit. Only the credit or service provider with whom you applied for credit can tell you why your application was declined. They are required to provide you with the reason in writing. Each credit provider has its own unique credit assessment criteria, which may include evaluating your affordability based on your income, expenses, employment details, length of residence, home ownership, number of dependents, and more.
As a registered credit bureau, TransUnion is mandated by the National Credit Act to collect, process, and share your information. When you sign an application form with a credit or services provider, you also agree to contractual clauses that allow them to submit the information you provided to the credit bureaus for verification.
TransUnion will only share your information as prescribed by the National Credit Act or with your consent, where applicable.
A judgment is granted by the court against a consumer who has not paid their debts to a credit/service provider. A judgment is public information and remains on your credit report for 5 years or until the judgment is rescinded by a court or paid in full. The display period a judgment is 5 years. These periods are in line with the data retention periods prescribed by the National Credit Act (NCA).
Default data is negative information supplied to TransUnion by a store, bank or other credit provider if you default on your credit agreement with them, typically after missing three consecutive payments. The display period for a default is 1 year, in line with the data retention periods prescribed by the National Credit Act (NCA). However, default data will remain on your credit report until the default is paid in full or the display period has expired.
Don't ignore the problem, hoping it will go away, it won't. The good thing about a negative credit report is that it can be fixed. Find out what is considered bad and good for your credit and how to recover from your credit mistakes. Here’s what you can do:
- Download your credit report and review it carefully.
- Make a list of your debts and prioritise them from most important to least important.
- Cut out all unnecessary expenses and use the extra cash to pay off your debts one by one.
- Negotiate or consolidate your debt by talking to your credit/service providers about a rate reduction.
- Never ignore letters of demands or summonses to appear in court for non-payment. Phone the credit/service provider and try and adapt your repayment plan.
- Stick to your plan and be disciplined, do not spend what you can’t afford to repay and look at your Credit Report monthly to track your improvement.
To ensure your TransUnion credit report only contains accurate information that pertains to you, you can log a dispute or query by calling TransUnion at 0861 482 482 or log into your profile on www.mytransunion.co.za. Only inaccurate information can be removed, and negative but accurate information will remain on your report as prescribed by the National Credit Act.
Beware of "credit repair agents" who may charge you upfront fees to remove valid listings from your credit report. This practice is illegal and can result in financial loss. You can query or dispute any information on your credit report directly with the credit bureau at no cost. A credit bureau typically concludes investigations within 20 business days of receiving your request.
It is best to avoid applying for credit while a dispute is pending. To ensure a quick turnaround time, make sure to provide all necessary documentation to support your dispute.
A dispute refers to a challenge of the accuracy of credit information contained in your credit report. If there are factual inaccuracies in the information on your credit report, you can log a dispute with TransUnion. However, if the information is factually correct but needs to be updated due to a subsequent event not yet reflected, this is considered a query rather than a dispute. In such cases, TransUnion will treat the matter as an update request or query.
- Factually incorrect: This occurs when the information on your credit record is factually incorrect. For example, the listing on your credit report does not belong to you. This may include any court record, default, payment profile line, or trace alert. Another example is if you did not apply for debt review, but your credit report is updated with a debt review indicator.
- Fraud: This happens when someone fraudulently applies for credit in your name, and you are now listed for the debt.
- Outdated information: This refers to situations where the data retention period that bureaus follow in retaining certain information on your credit report has expired, but the data still appears on your profile.
A query relates to the content of information on your credit report and is not a challenge to the accuracy of information on your credit report. If the information is factually correct but needs to be updated due to a subsequent event not yet reflected, this is considered a query rather than a dispute
Personal Information update: Updating your personal information on your credit record, for example, your name, address, employer, and ID number. To update your personal information, we require you to provide us with the relevant, verified information.
A credit score is a 3-digit number. Your TransUnion credit score is a representation of how you manage your existing credit obligations. The TransUnion credit score is not an endorsement or a determination of your qualification for a loan. The TransUnion credit score serves as a personal benchmark that can help you improve your credit behaviour.
A TransUnion consumer credit score can range from 0-999
- EXCELLENT644-999
- GOOD622-643
- FAVOURABLE584-621
- AVERAGE557-583
- MODERATE539-556
- CHALLENGED517-538
- LOW1-516
A consumer credit report will be updated with new information provided over time by credit/service providers. Your TransUnion credit score is calculated based on the latest information contained in a credit report at the time the score is requested.
TransUnion has introduced a new, more advanced scoring model. This model offers a more detailed and personalised view of your credit profile, helping you better understand how you’re managing your credit. To support you on your credit journey, we provide Score Reasons — clear explanations that show your score is at its current level and what actions you can take to improve it.
As per the National Credit Act a credit or service provider may determine for itself any scoring or other evaluative mechanism or model to be used. This means that the TransUnion credit score is not the same score that lenders will use to decide if you qualify for credit or a loan.
A credit risk score used by lenders will include not only the credit information held by a credit bureau, but also additional elements such as your income and expenses, your demographic information, current and past relationship with the lender, collateral and more.
- Too much debt: Having too much available credit can sometimes harm your credit score. Credit or service providers may feel that you could spend more than you could potentially pay back. You might want to consider closing a few accounts or asking to have your credit limits reduced.
- High account balances: High levels of debt can signal to potential credit or service providers that you are spending more than you can afford. It is a good idea to use your credit cards regularly but remember to keep your balances below 35 percent of your available credit limit. If you have balances above 35-50 percent, you could see your credit score start to drop.
- Late Payments: Late payments will drop your score. In other words, a 90-day late payment is more damaging than 30 days late. Always pay at least the minimum amount on your credit account each month.
- Too many new accounts: Looking for new credit can equate with higher risk if the enquiries are done across many different industries within a short period of time. Opening several credit accounts in a short period of time can affect your TransUnion score.
- Public Record information: Bankruptcies and judgments on your credit report are items of public record that indicate that you did not honour a particular debt obligation. In some cases, such as judgments, it also indicates that the credit or service provider took legal action against you to collect the debt. An item in this category will significantly lower your score. Payment of these types of items will not immediately undo the damage to your credit score.