Debt stress on the rise

Of the 17,53 million credit-active consumers as at the third quarter of 2008, 59.5% had good credit records. This percentage decreased from 60.4% in the previous quarter (June 2008) and from 63.6% in June 2007. This indicates that the level of debt stress increased, with an increase of 0.9% in the percentage of consumers with impaired credit records since the last quarter and an increase of 4.1% since June last year (the quarter ending June 2007).

There were 124,66 million enquiries made on consumer records in the third quarter of 2008, representing an increase of 13.1% or 14.42 million from the previous quarter and an increase of 22.8% or 23,13 million since the quarter ending December 2007. There has been a consistent increase in enquiries on consumer records since December 2007. There are various reasons for the increase in enquiries, including enquiries made by credit providers for risk management purposes, for marketing purposes or for debt collection purposes.

Enquiries due to consumers applying for credit has been decreasing, with 12,81 million enquiries in the December 2007 quarter, 12,75 million enquiries in the June 2008 quarter, and 12,41 million enquiries in the September 2008 quarter.

Banks and retailers continued to be the most frequent users of the consumer credit information in the third quarter of 2008, accounting for 32.7% and 32.9% of all enquiries respectively. While enquiries by banks decreased by 6.1% since the last quarter, enquiries by retailers increased strongly, with an increase of 44% since the last quarter.

In the third quarter of 2008 there were 46,459 free credit reports issued to consumers and 9,687 disputes on the accuracy of the credit information were lodged by consumers. A total of 254,140 free credit reports have been issued to the consumers since the Act became effective on 1 June 2007, while 67,311 disputes have been lodged by consumers over the same period.