Facing the blacklist: Over 6 million in the red

The 16.9 million consumers together have 50.98 million accounts with credit providers and other suppliers of goods and services. This translated into 3.02 accounts per credit active consumer.

A consumer's credit record contains information on the manner in which consumers manage their accounts. This information is managed by credit bureaux, which receives the information from banks, retailers and other credit providers. When a consumer applies for credit from a bank, retailer or other credit provider, these parties would normally obtain a copy of the consumer's credit record from a credit bureau. This will indicate whether the consumer manages his or her finances responsibly, and indicate whether instalments are paid on time or not. A consumer who is generally up to date with his or her accounts, will likely qualify for further credit. However, the credit provider will also consider whether the consumer can afford the repayments or whether the new credit may cause the consumer to become over-indebted.

If a consumer's credit record shows many late payments, arrears or write-offs, or indicate that the consumer is over-indebted, this may cause the credit provider to turn down the application.

Credit bureaux are required to be registered with the National Credit Regulator. They are further required to provide quarterly reports to the National Credit Regulator. These reports indicate that, out of 16.9 million credit active consumers held, 62.3% were classified as "in good standing". This was made up of 7.9 million (46.6%) consumers being up to date with all their accounts and 2.7 million (15.7%) consumers having missed only one or two instalments.

Although the majority of consumers are "in good standing" with their credit providers, 6.38 million consumers (37.7%) have an impaired credit record.

Across the different credit bureaux, more than 88.5 million enquiries were made on consumer records during the September 2007 quarter, most of these by credit providers. This was lower than the 115.6 million enquiries in the June quarter.

The information supplied by credit bureaux indicate that over 35,000 disputes were lodged by consumers at different credit bureaux. 59,169 consumers obtained copies of their credit bureau report between June and September 2007 and 85% of these reports were provided free of charge. Consumers have the right to one free report per year.

The data cleansing regulations of the National Credit Act defined different types of data that had to be removed from consumers' credit records. This ranged from dormant accounts, adverse entries related to debt of less than R500 and certain paid up judgements. The credit records of more than 6 million consumers improved as a result of implementation of these regulations during 2007.