Your credit report changes all the time, but some things on it take longer than others. Just because you’ve settled a debt doesn’t mean that the story about it disappears immediately. Your credit story is about more than the actual debts on your report.
Experian, one of the credit bureaus Bayport works with, provides valuable information about the different types of information on your credit report, why and how each category influences your credit score, and for how long that information stays on your report.
This is important information that you should bear in mind when you make decisions about debt and getting out of debt.
Defaults (late or no payment)
Default data is negative information that a credit provider gives to a credit bureau if you fail to pay your account. A default remains on your credit report for one or two years, depending on the description of the default.
A credit provider can have you classified as a “late” or “tardy” payer if you are often late with
payments. This subjective classification remains on your report for one year.
When a credit provider has taken action against you, such as sending you a letter of final demand, writing off your bad debt or repossessing your furniture, the default stays on your credit report for two years.
If you settle your debts, the detail of the default will be removed from your credit report as soon as the credit bureau receives proof of payment from the credit provider. However, in terms of the National Credit Act, the fact that you have defaulted must be retained on your credit report until either the one- or two-year period has passed.
Court judgements
When a court has instructed you to pay an outstanding amount, the judgement will remain on your credit report for five years. If you pay the full amount before that time, the judgement will be removed from your credit report as soon as the credit bureau receives either proof of payment from the credit provider or a valid court order rescinding the judgement. However, as with defaults, the fact that there was a judgement against you remains on your report for the full five years.
Enquiries
When you apply for credit, the credit provider makes an enquiry about your credit record. This information is recorded and will reflect on your credit report for one year. A high number of these enquiries could indicate that you are “shopping around” for too much credit, which could mean that you are in financial difficulties.
Complaints
If you lodge a complaint about your credit report and your complaint is rejected, this information will be reflected on your credit report for six months.
Debt restructuring
Information relating to applications for debt restructuring remain on your credit report until a clearance certificate is issued.
Sequestration
A sequestration order remains on your credit report for five years, or until a rehabilitation order is granted. A rehabilitation order will continue to reflect on your credit report for a further five years.
Administration order
If you have applied to be placed under administration, this will remain on your credit report for five years or until the administration order is rescinded by a court.
Other information that may appear on our credit report:
- A trace alert can be placed on your credit report by a credit provider who has been unable to make contact with you and has asked to be notified when any updated contact information is loaded on to your credit report
- You can ask that the credit bureau includes an explanation of facts or conditions that affect you on your credit report. For example, if your identity document has been stolen, you may want this information included in your credit report to prevent your identity being used fraudulently.
What you have to do
Check your credit report at least once a year to make sure all the information it contains is correct and up to date. If you believe there is any information on your credit report that should not be there, or that should have been removed, you should immediately lodge a dispute with the credit bureau. The bureau is obliged to investigate and respond within 20 days.
Once you have settled an overdue loan, wait 14 days and then request your credit report to make sure that the negative information has been removed. Why 14 days? Once the default has been paid, the credit provider has seven days to update its information and inform the credit bureaus of your paid-up status. The bureaus, in turn, have seven days from receiving the notification from the credit provider to amend your credit report.
