Consumers “score low” On Credit Scores

Tristan Powys (Credit Counselor) @ Lucid Living

A survey has found that many South Africans fail to realise the importance of knowing their credit score, with almost three quarters of those polled saying they did not know their credit score.
The poll revealed almost three quarters (73%) of people did not know what their credit score was. The flash poll also revealed that only 18% knew their credit score, while 9% didn’t know what a credit score referred to.

Knowing your credit score is vital, as it is an indicator of your creditworthiness. Credit scores are used by lenders to decide on whether to give you a loan. Employers, insurance companies and landlords can also ask to check your credit score, so it’s worthwhile knowing what your credit score is. A good credit score means you are less likely to be rejected for home loans, car or personal loans.”

The poll unfortunately shows that consumers don’t understand the importance of knowing their credit score and there is clearly a need to create more awareness around this issue, so that more people regularly check to see if their finances are in order.

Those that have never checked their credit score run the risk of losing out on that dream home or car as they could be rejected for a loan because they have a poor credit score. Consumers, particularly those with a good credit score, could also run the risk of having their identity stolen. Credit active consumers should check their credit score and report regularly or at the very least once a year and go through it line by line to ensure that all is in order. Take a look at your credit score and report now – Lucid offers you a plain language credit report and credit score.

According to the National Credit Regulator in the quarter ending March 2012, 10 357 disputes were lodged in respect of the accuracy of the information recorded on consumer credit reports. More disputes were resolved in favour of complainants (7 722) as compared to disputes where credit reports remained unchanged (1 646). “This is another reason for you to check your credit score, as there is always a chance that incorrect information has been submitted to a credit bureau, which can lower your credit score” said Adv Kate Thambiran, CEO of Lucid Living.

“There are also a number of things that could affect a credit score negatively, including late payments, outstanding debt and the number of creditors you have. Consumers could be rejected for a loan for any of these reasons so it’s vital that they find out what they are doing wrong so they can take corrective steps and improve their credit score going forward,” concludes Thambiran.