CREDIT REPORT Q&A SESSION 3

Justin Harrison 00:06
Good evening, everyone. If you're just joining us, we are just sending out all the notifications quickly. We're going to just deliver all the notices by WhatsApp, so everybody can get on to the live stream. We decided to do a slightly later than a normal webinar. Obviously, with people going back to work, we feel this is a more appropriate time. We've also done some research, and surveyed everyone and found out that this is the best time, at the moment, for everybody. So, if you're just joining us, please comment in the comment section; let us know your name, let us know where you're from, and if you've got any specific questions about your credit report, your credit profile, your credit status, please drop those in the comment box on your screen, and Dawie and I will be doing our level best to answer your questions this evening. This evening's live Q&A session will run for 45 minutes, so we hope to be done by the very latest at 6:45. I know that everybody's got families to get to. Dawie’s got a young child, I've got young children. So, we are currently taking away time from our families to provide this info and try and help you guys. Please make the most of it; ask all your questions, get all your questions in tonight because it will be a while before the next My Credit Status Live Q&A Session is held.

David Bester 01:46
Just give it a few more minutes and see how many people come online.

Justin Harrison 01:50
In the meantime, I'll quickly be answering some of the questions that have come up so far and the people that have already commented. So Sibusiso says: “I want to check my credit score”. Sibusiso, that's really great. What I suggest is, go to mycreditstatus.co.za; go and fill in your details, you'll go through security checks, and our system will deliver a credit report for you. You'll be able to see everything; you'll be able to see all your previous accounts; you'll be able to see a complete and utter overview of your credit profile and you'll be able to get your credit score. So, I hope that helps. Lots of people: “I want my credit score”; “I want my credit score”; pretty much the same answer. Guys, please go to mycreditstatus.co.za; you'll be able to get your credit profile there. And all you have to do is provide the details, you provide your name, your ID number, email address, and basically, our system will go and pull the report for you. It'll give you your score, it’ll give you a credit profile, it'll give you absolutely all the information on your profile, that you need. So, very simple: mycreditstatus.co.za. Okay, Dawie, do you want to take this one, so long?

David Bester 03:19
Yes, sure. “Can you remove debt review from credit review; I've paid all my accounts?” So, if you have paid all your accounts, all you need to do is, just need to get a clearance certificate from your debt counsellor. You can ask your debt counsellor, they will send it to you, and then you can take that clearance certificate and just send it off to the credit bureaus. For some reason, some debt counsellors don’t automatically send this clearance certificate. I don't know why. I think it's a bit unethical but yes, just ask them for a clearance certificate, send it to the credit bureaus and the debt review flag will be removed from your credit report.

Justin Harrison 03:52
Ja, absolutely. Absolutely. And yes, I think the most important point about anything relating to being under debt review or having accounts paid, Dawie, people need to really make sure that they keep a documented trail; documented proof of any payments that they've made, any debt review interactions they've had. And then very simply, just make sure that you provide those documents when you come to the point of wanting to update your profile, and if you've provided all that documented evidence, then that should be good.

David Bester 04:31
Ja, it’s pretty simple. When you send it to the credit bureaus, you can wait up to about 30-days, and then they'll remove it for you. It's important to remember that you're basically starting off on a clean slate. So, you're new to the whole credit world again. So, you'll have to start building up some credit. If you go under debt review, you've got a zero-credit score. And until you build up some good history, show that you can repay your accounts on time, you will then see your credit score increase over time. It usually takes anything from six months up.

Justin Harrison 05:06
Ja, absolutely. Guys, if you do have questions, please drop them in the comment box. We will attend to those questions as we go. This is a live Q&A session, so if you do have questions, please post them and we will do our level best to answer them. Some of the most common questions that we get - if it's not around debt review - people usually want to know if they have an incorrect listing, Dawie. How do they go about dealing with an incorrect listing? So, somebody goes on to mycreditstatus.co.za, they become a paying member, or they take a once-off report, and then they see that there is in fact an incorrect listing on their profile; how do they go about dealing with it?

David Bester 05:45
Yes, so I can tell you two ways: One is, how you can deal with it on your own and how you can use My Credit Status to deal with the incorrect listing. So, if you want to do it by yourself, you basically need to write up a letter, which is called a dispute letter. You need to dispute that information with the credit bureaus. You send that off to the credit bureaus, along with the proof of your claim, and your ID and your proof of address. You then wait for about 30-days. If the credit bureau doesn't get back to you, you can then threaten them a little bit about going to the NCR, because legally, they have to get back to you within 30-days. If you use My Credit Status’ system, I think I can actually share my screen. It's a lot easier if I can show you than just telling you how to use it. Let me just share the screen quickly.

Justin Harrison 06:45
Dawie, while you’re bringing up your screen, I just want to quickly ask you to clarify for a lot of people because a lot of people don't really understand the relationship between the credit bureau, the National Credit Regulator and in terms of how that process works. Maybe you can just give a quick summary about that?

David Bester 07:05
Okay, so basically the National Credit Act oversees all the credit bureaus and they have to undergo monthly audits with the National Credit Act, to prove that they are in line with the National Credit Act’s regulations when it comes around credit reports, So, not anyone can just decide to become a credit bureau; even us, it took us months to get a credit bureau license. And even us, we have to go monthly audits as well to ensure that we comply with these rules, with the NCR. And that's to protect the consumer. Before the NCA was there, anyone could just blacklist people, left, right and centre. It was a dog show really. You would take out some loan and if you one day late, you would get listed as a bad payer. Luckily, that's the good thing about the NCR, they are there to oversee these things, and now, there's a lot of rules that these credit bureaus have to undergo, in order to protect the consumer. And one of those is to get back to the consumer, if the consumer has a query, within 30-days. So, if a credit bureau doesn't get back to you, then you can go to the NCR, and you can complain to them about it. All the credit bureaus, I can tell you, are very scared of the NCR, so they take those matters very seriously.

Justin Harrison 08:29
Ja so, Dawie, maybe just correct me, if I'm saying this incorrectly, but the NCA, which is the National Credit Act, right? The result of it was the NCR, which is basically the National Credit Regulator, and what a lot of people think, when they think of the NCR, they typically think of companies that provide loans and things. But what a lot of people don't know is that the NCR is actually an independent consumer body. It is there to help consumers and oversee the industry and make sure that whatever industries the NCR regulates, that consumers rights are protected. Am I correct in saying that?

David Bester 09:15
Yes. So, the ‘Act’ is the rulebook, and the National Credit Act is like the rulebook. If I can put it that way. And the ‘Regulator’ is like you just said; it's the body that is governing everything.

Justin Harrison 09:28
So, the important takeaway for people, that they need to understand is, you have your credit bureaus sitting over here, and then you have this oversight body called the NCR - the National Credit Regulator - which grants the bureau's licenses and makes sure that they're doing the right thing. Because ultimately, the credit bureaus don't own your data as an individual; the credit bureaus are essentially custodians of the data, meaning, they are given the data to look after; they're given the responsibility of taking care of that data and using that data, ethically. And the National Credit Regulator is like, you know, the score principal; they’re there to make sure that everything's going the way it should be, right?

David Bester 10:12
Yes, exactly, and very few people understand that point, really. So, once you understand that the credit bureaus actually don’t own your data, then the lightbulb will go on, and then you'll see like, okay, I can actually get this listing removed by engaging with a creditor because the creditor actually owns the data. So, you can negotiate with your creditor to get your default listings removed.

Justin Harrison 10:35
Ja, 100%. Now Dawie, before you go into your screen here, I mean there's a couple of things I want to quickly jump on before we start getting into the actual report. I see so many people coming to mycreditstatus.co.za, every day, every hour, people come to get their credit reports. The two most common things I hear: “Please can we get our credit score?” Okay, so, first of all, I’ll answer by saying: we can't give you your credit score; you have to go on to mycreditstatus.co.za, register an account provide your details, go through the security check, which will basically verify that you are who you say you are because you can't check somebody else's report, you can only check your own reports. And then once you have paid for your report, and you can either take a monthly subscription, which comes with a whole bunch of benefits and services. Alternatively, you can take a once-off report. Now, the question I often get around this, Dawie, is “But there are platforms out there, that offer me my score for free; why do you guys charge for your service?” Please maybe explain that to our viewers here this evening.

David Bester 11:39
Okay, so you get two licenses: The one is a credit bureau license, and then the other one is a credit bureau reseller license. So, My Credit Status is a reseller; we are not a credit bureau, itself. So that means that we have to pay the credit bureaus to get your data. But then, what we do on our end is decipher the data and compile it into a report that you can understand. And also, what we're doing is, we don't use your credit report data to sell you different offers based on your finances or based on your credit score. So, what happens with a lot of these platforms that you go onto, for free credit scores is, they give you your credit score for free but in return, they sell your data and they use your data, to sell your different offers. So that's why, you will see when you log in or when you request your score from some of these sites, they will immediately start sending you emails, such as, get a personal loan or get a credit card or whatever.

Justin Harrison 12:38
But Dawie, if I can just interrupt you? I’ve got a really good example of this, right. I like to sign up for other providers in the industry and see what they're offering. There is one company in particular, out there, who when I put my details in, and they showed me my credit score. Okay, so that was great. I found that the report was pretty difficult to read, it wasn't laid out in a way that is user-friendly and I mean, I'm somebody in the industry, so I found that to be quite complex. But what I found was very strange, pretty much within, I'd say 24-hours of me doing that inquiry, my phone started ringing. I started getting SMS’s, I started getting calls and the ironic thing for me was, it was the same offers that were shown to me within that platform. So, what people need to appreciate: ‘free’ always has a price, right? People think that, if it's free, it's free. Well, I don't know about everybody else but I protect my data pretty much. I think that my personal profile is something that I look after, it's something that I treasure because it gives me access to finance, it gives me access to be able to access accounts and things, at preferential rates. So, I'm very protective of my data. I don't give my data out easily, and certainly, I don't know how you feel but for me, that is a big concern. And that's one of the reasons why I steer clear of free reports.

David Bester 14:03
No, exactly. You need to remember also, that the majority of the people, that are looking into their credit scores, are usually people who’ve got bad credit scores. So, they’ve already got financial problems. Now, if you sell people a credit card with an interest rate of 36-37%, you're not helping that person; you're actually just causing more harm to that person. And we are publicly, actually, telling people, in most cases, not to take personal loans, which is pretty unheard of by any credit bureau or credit bureau reseller. Because that's how they make their money and then we go, and we've got no ulterior motives, so that's exactly why we can do that. So, we’d rather educate the consumer than cause more harm to him or be the reason for him to be in a worse financial status later.

Justin Harrison 14:54
Absolutely. Dawie, I just want to address this question quickly, from Nicole, and then I also want to do a follow-up comment about something, while we're talking about loans and debts and things. There's a feature that's been added to our reports and it's just absolutely mind-blowing. I got my new report two days ago and I was just so impressed with it. I want to question you about it and also talk about it a little bit but first of all, just addressing Nicole's question here. She says, “How many accounts should I have to get a good credit score?” And she's obviously talking about credit cards, mobile, car loans etc. “Do you also need retail accounts”? What is the sort of structure, that somebody should have, in terms of their accounts and loans, in order to have a good credit score?

David Bester 15:43
Ja, so Nicole, there's no set number of accounts that you need. I've got two accounts in my name and it's an insurance account and my Telkom account and I've got a perfect credit score. Obviously, I've got a credit card as well, which I use to build up points but the credit card is also really useful, in terms of your credit utilisation. So, that is the only reason why I have a credit card. I never have credit card debt; I never have minimum payments that I have to pay on my credit card debt. I've got an automatic payment set up on my FNB profile that, at the end of the month, it pays off my credit card for my debit card. So, you don't need to have a lot of accounts, you don't need to have a car loan or a retail account. If you've got your insurance and you've got your mobile account, that's more than enough. If you're responsible enough to use a credit card for utilisation, then, by all means, go ahead. It's a great tool to increase your credit score but that being said, you need the discipline to use a credit card properly. Never use a credit card to actually make debt or to use that credit facility within the credit card.

Justin Harrison 16:49
So, Dawie, this ties into my next point and something that I think nobody really understands the value of is your debt or credit utilisation ratio. I think what people really have to appreciate is, that it's not really how many accounts you have or, you know, all of those things. I mean, it does have an impact but the biggest thing; the two biggest things for me and I've seen this in my profile movement: Number one is making sure you make your payments on time. Showing lenders that you are a responsible financial citizen by repaying your debts on time, that goes a long way to increase your score but the other thing and I think this is a game-changer for My Credit Status is that, to be able to know what your debt utilisation ratio is and to very basically explain this to people. Maybe you can show them on the report just now. If you have, let's say, for example, a credit card with a 100,000 limit on it, you should never use more than 30%. The moment you got over 30%, it's going to drop your score. So, something very interesting. I have, same as you, Dawie, I have my primary cheque account and I have a credit card. And usually what I do is, put money into my credit card, rather than actually accessing the credit facility. And recently, I've been playing around with things a little bit, in conjunction with mycreditstatus.co.za, and I wanted to see how my spending patterns on my card, affects my credit score. Something very, very interesting. I went to a 32% debt utilisation ratio for the last month. I didn't know it would be 32%. I was actually trying to try to get it just above the 30% mark to see what would happen. And instantly, my credit score dropped. Not by a lot, but just within that one month, I lost 10 points on my credit score. So, I don't think people can really, fully appreciate how important it is, to stick within the debt utilisation ratio and the game changer of My Credit Status is, that we've actually included this on our reports and as far as I know, nobody else is doing this. So, when you go into your mycreditstatus.co.za credit profile – Dawie’s bringing it up on the screen now - it will actually show you, based on how much facilities you have and how much of that facility you've used, and it will give you a percentage. And if you're rocking those percentages past 30%, that is something that you need to get under control, in order to get your score back up.

David Bester 19:22
Yes, exactly. And the demo that I’ve got here at the moment – it’s a demo account with dummy data - so this person doesn't have any credit facilities, which means he's got a zero-credit utilisation. I would bring up my personal profile if I could, but I don't want to show everyone my personal details. There you can see the credit utilisation score but anyway like Justin said, the most important thing, you don't have to go into all the technical details. Make sure you are using less than 30%, then you'll be fine. If I put it this way, the majority of the credit score is about your payment profile, right, or your payment history. So, that accounts for 40% of your total credit score, which is pretty huge. Now, the second most important part, as Justin said is credit utilisation. And that accounts for 30% of the overall credit score. So, if you're using more than, let's say 50% or 30% of your utilisation ratio if you just fix that one level problem, then, you're going to be, basically, fixing 30% of the whole problem on your credit profile, which is the credit utilisation. And very few people know that. I also don't know why the credit bureaus and all the other platforms out there don’t put more emphasis on it but, yes, that's basically what we’ve seen. We’ve been doing these webinars, these live Q&As for quite a while now. And after seven years in the business, we have found that this is something that's lacking completely from people. People don't know about this; they don’t know about their credit utilisation ratio and that's why we decided to build this graph and provide an explanation as to exactly what you need to do. If you go over 30%, your credit score gets docked. If you go over 50%, it gets docked again. 80% again, obviously as you get close to 100%, the maximum amount of points will be deducted from your credit score.

Justin Harrison 21:13
So, Dawie, I mean, you obviously spearheaded the debt utilisation ratio, within My Credit Status, so this is something you’re intimately familiar with. And I think, what a lot of people don't know about the credit reporting industry and this is really a very important point, the credit reporting industry was never designed for consumers. It was never designed for you and me, and the average person on the street. The credit reporting industry was developed for businesses to assess consumers, as to whether or not they should provide them with loans or accounts, right. And so, what happened, traditionally, with credit reporting is, that it was an institutional-based business, and eight years ago, mycreditstatus.co.za came into the market and we said, you know what, we believe that the consumer needs to be empowered; the consumer needs to understand how to work with their data, how to improve their profiles and how to improve their scores. And so far, none of the bureaus has done anything about it and that's where we come in as a credit bureau reseller. We are able to come in and really bridge that gap and provide a huge amount of financial education resources, and most importantly, put together a report that the average consumer can read. Dawie, I don't know if you remember the days of ITC, but if you read an ITC report, you may as well have been reading hieroglyphics, as far as I'm concerned because it just made absolutely no sense, whatsoever.

David Bester 22:42
Ja, look, like I said, very few people know this but credit reports are actually pretty new in the market. It’s only since the 2000’s where banks in the US, actually, started using FICO scores. And from FICO scores, Experian, and TransUnion, and those guys came along. TransUnion ITC was actually in the car business and not the credit bureau business at all. It’s only later on in the 2000’s, where they actually bought over a company and they became TransUnion ITC. And then they changed their name again, only to TransUnion, which is what they are now. So, it was actually a car company; it wasn't a credit reporting agency.

Justin Harrison 23:22
Okay, so this is a good question before we dive into this report. Siphiweleloe wants to know: “Does paying more than the minimum instalment, help to increase your credit score?” It's a good question Dawie; what's the answer?

David Bester 23:34
Yes. The fact that you have to repay the minimum amount on your instalment, means that you're, most probably, using more than 100% of your utilisation ratio. So, if you want to fix about 30% of the overall total problem on your credit score, then I would get that utilisation score down to zero. Pay as much as you can, get that thing down to zero, to under 30% and you will see your score credit score just skyrocket.

Justin Harrison 24:02
Dawie, I want to put you on the spot here. So, you obviously answered the question from the perspective of, if you pay more, you’ll decrease your debt utilisation ratio. But the question is, “Does paying more than your minimum instalment, actually, push up your score?” So, never mind the debt utilisation ratio, let's talk, specifically, about paying more than the minimum; if you pay more than the minimum monthly instalment, does that affect your score?

David Bester 24:34
Well, if you pay more, then your utilisation will go down because you're not maxing your credit score or your credit facilities out anymore. If you pay more but you're still in heavy debt, then it’s not going to make much of a difference but overall, it's going to be a very big problem because you're not going to be able to manage your repayments. So yes, I would say definitely pay more than the minimum.

Justin Harrison 24:58
Okay, that's a financially prudent thing to do. Yes, it will decrease your debt utilisation ratio, but even if, let's say, for example, that person's debt utilisation ratio was between 80 and 100%, and they pay more than the monthly instalment, but they’re still in the 80 to 90% ratio of debt utilisation. Is paying more than the monthly instalment going to help them? That's the bottom line to this question.

David Bester 25:27
In terms of a credit score or in terms of financially?

Justin Harrison 25:30
In terms of the credit score.

David Bester 25:33
Well, in terms of the credit score, no, not really. If they're sticking to their ratios and best practices, then, that's not really going to make much of a difference. The most important part is, don't fall behind on your payments, and if you've got a minimum amount, never try, actually, never go into debt.

Justin Harrison 25:56
So Dawie, I want to make sure people understand here because the moment people start to understand their credit profiles and their credit reports and the things that tick boxes to make scores go up and down. It's human nature to try and work that system, so I want to be very clear about this point, right. Paying more than your monthly minimum alone is not going to have an impact on your score per se. However, reducing your debt utilization ratio, will, in fact, help your scope. But the reason for paying more than your monthly instalment, is actually if you go back to the financial basics 101, it is to reduce debt. Okay, that is your primary reason for it. if you're paying more than your monthly payments, simply to try and beat the score, you're doing it for the wrong reasons. You need to do it to get your debt utilization ratio down and I think that's the point that I want to hit here, Dawie. I don't want the message to go out, that people think, you know what, if I pay a little bit more, like 10 bucks more or 100 bucks more than my monthly payment, that's going to have an impact on my score. What's going to have an impact on your score, is bringing down the amount of debt you're using versus the amount of facility you have. So, you have to do it for that reason. Would you agree with what I'm saying?

David Bester 27:11
100%. I think the most important part is, what people don't understand about minimum instalments on a credit card is, that minimum instalment means that you are most probably paying a 30%+ interest rate, and that is massive. It's absolutely insane to be paying that kind of interest. Rather stay clear of that kind of debt and rather use your credit facilities wisely.

Justin Harrison 27:33
Ja, absolutely. Sorry, Dawie, there are lots of questions coming through; I'm just trying to tackle them quickly as they come through. So, this user is asking, “I would like to know when you have paid the loan and they keep saying you haven't finished, Nd you still you while you have been pensioned now?” I don’t know. Dawie, maybe you can help make sense of this?

David Bester 27:58
I think what she’s trying to say is, she paid the personal loan off; the maximum amount but now she's got extra fees. And that's usually what happens, these personal loan companies add a lot of fees, they add late penalties and they obviously add interest, to the late payments that you had. So, I would bet, she's referring to that; referring to the late fees. She's probably paid off the loan but now she's got extra fees, that are still outstanding. And that's probably what I think she's referring to. I would go to them and I would tell them, listen here, I've paid the full amount. Can we rather just settle the account? And if they don't want to deal with you, you just got to tell them, listen here, either we come to an arrangement or I'm just going to default on this loan. You'll be surprised that they will reach somewhere in the middle and if you're not happy with it, go to the Credit Ombud and hand the case over to the Credit Ombud. Tell them, listen here, you’ve paid the loan. This company doesn't want to settle with you, you don't have the money to pay, and you want them to help you and interact with these creditors.

Justin Harrison 29:09
Dawie, another really important point is that people need to appreciate, that when they have paid an account, don't just pay an account and think that's it, right. Please guys, when you pay accounts up, insist on a paid-up letter; insist on getting confirmation, in writing that you have settled your account in full and that the account is in fact closed. I have an example of when Blue Bean credit card was still around, which was a Standard Bank initiative. I took out a credit card, I had the credit card, I've never really used it. After a year, I closed the account and there were some admin fees and whatever that they charge. Two years later, they came back to me and said I owe them R2,500 right. And it really was my mistake, as much as they were in the wrong, it was my mistake for not having got a paid-up letter, for not having got confirmation that the account is closed. I cannot stress this point enough. Please document whenever you pay an account; please document when you close your account; and please keep a documented proof of it because when disputes come up, this is the key that you’re going to use to unlock it.

David Bester 30:19
Yes, I actually have a similar instance. Back in the day, when I still had accounts with ABSA, I went to close my accounts and they actually charged me, to close my account. Luckily, I kept the proof and then a year later, they started sending me messages that I owe them interest and it was something ridiculous like 1,000 bucks. And I just showed them the proof and told them, listen here, I closed this account and because I had the proof, they obviously couldn't do anything and I just dropped it.

Justin Harrison 30:43
Absolutely. It’s like a court case - if you’re got proof, you're in the clear. The next question or comment, “I heard that settling your credit, won't boost your credit score. You better pay monthly”. Dawie, what do you think about this one?

David Bester 31:01
Yes, technically, you are correct. Settling your account, won't increase your credit score. When it comes to credit scores, 20% of your total credit score, is based on the age of your accounts. The longer you have accounts, that counts more towards your favour. They usually want to see some accounts, up to five years. That's a really good, good age for them. But, short answer - no, it doesn't really increase your score. But, if I could pay off debt, I would pay off debt. You can still have insurance accounts; you can have a mobile account and that can also build up age. So, for personal finances aspects, yes, definitely pay off your accounts if you can. Don’t have debt because you're paying interest on the debt. It's absolutely stupid. If you've got money, rather settle your debts, and live a stress-free life. There are other means of increasing your credit score, like a mobile account or insurance accounts.

Justin Harrison 31:58
Dawie, I think the really sad thing is that, traditionally, credit reports, credit bureaus are advocates for debt because the thing is, most people are accessing their credit profiles because they want to access finance. That's how they make money. And the thing is, people want their scores because they want to access debt. Let's call it what it is. But here's the thing, we, first and foremost, advocate financial freedom, financial literacy, and being not under the burden of debt. Now, the thing is, there's a good time to have a loan and there's a bad time to have a loan but if you are going to take out loans, please remember this, you need to demonstrate that you are a good financial citizen, and good financial citizens don't use the entire facility, make their payments on time, and that makes people want to give you finance; it makes people want to give you access to loans. Always remember this, in the back of your mind. It's a little bit like dating. I think I used this analogy in the last example too, in the last week's Q&A session. When you're dating, you really want to put your best foot forward. You want to go and clean up, you want to have a shower, you want to really present yourself, and it's the same thing when it comes to personal finances. You want to clean up your personal finances, you want to make sure you're not over-indebted. You want to make sure that you meeting your monthly payments, and that will demonstrate to people that you're a good financial citizen, and therefore they will want to lend your money. Would you agree with that, Dawie?

David Bester 33:33
100%

Justin Harrison 33:34
Okay. Dawie, you may want to take this one, from Welly.

David Bester 33:41
“Do the payment disputes at the bank affect my credit score monthly?” “Payment disputes” – do you know what he's referring to?

Justin Harrison 33:50
I'm not entirely certain but let's see if I do. Welly, please add another comment here if we've got it wrong, but I'm assuming, that you may have a dispute with a bank, about specific payments that you've been making them. Let me make this very clear. If you have payment disputes with anyone you've got accounts with and they decide to report that data into the central database, which all credit bureaus get the data from. Yes, it is going to affect your credit score.

David Bester 34:19
Yes.

Justin Harrison 34:23
“What do you do when you are blacklisted but you were not told and you only find out when you check your credit?”

David Bester 34:32
Yes, that happens quite often. There's actually a very easy way to settle this. A creditor has to give you 20 days’ notice, in writing - that could be emailed, it could be by fax, it could be a letter delivered to your door. Doesn't matter; it could be SMS but they have to give you 20 days’ notice before they can actually blacklist you. Legally, they are not allowed to blacklist you and some creditors still do it; it's completely illegal. Now, what you can do is, you can engage with the creditor that did it, and if they don’t correct the info, then you can go to the credit Ombud and you can dispute it will the Credit Ombud. You can also dispute it with the credit bureau and ask them to send you proof that this company actually, did send you notice in writing, within 20-days. If the credit bureau cannot prove this, which, most likely, they won't be able to, then they must also, legally, they have to remove it.

Justin Harrison 35:28
Ja, Dawie. This is another element that you pushed very hard with, on the platform of My Credit Status and I don't think people really realise how lucky they are, to have you on the call here this evening because you've been very instrumental in a lot of the technology behind My Credit Status. One of the biggest pains in the butt, for a consumer, is going and basically, putting a dispute in with the credit bureaus, so like, handling that dispute. And you've helped make it very, very easy at My Credit Status. If you find anything on your report, that is indeed not correct, not accurate, shouldn't be there, all you have to do is click one button. One button - it's a big green button, you say ‘dispute’ and then, when you click that dispute button, pretty much from that point on, our system will guide you on how to process your dispute with the credit bureau, it'll help you formulate the document that you need to send to them, and basically tell you exactly what to do. Dawie, I really wish we had this system, individually, 10-years ago because I can tell you, this has also been another game changer for My Credit Status. For people to be able to go on, find the incorrect listing, click a button, and literally, within a couple of minutes, they’ve generated a dispute. Again, another first in the industry; a complete game changer and something, I think, you can be very proud of for bringing it into My Credit Status.

David Bester 36:53
Yes, we need to add that, it's only available for our members. You click on the dispute generator button like Justin just said. It's one button that you have to click. From here, you just choose the dispute from the drop-down list and choose what you want to do – have it removed, update it; you can upload any supporting documents if you have; click the button, and then you get your dispute letter. You no longer have to go get any legal templates; get a lawyer to send you or write up a legal letter. You can just get it directly from the platform.

Justin Harrison 37:25
[Inaudible] If you're going to go get a lawyer involved and stuff, I mean, that's going to cost you money. This is free money right there, right there on our system. So, I think that's fantastic. Dawie, the next question comes from Lerato, wanting to know: “Does settling a personal loan increase the credit score?” I think this has been asked in another way earlier but perhaps just hit this one quickly for us.

David Bester 37:53
I’m going to give it a very short answer because we've explained it already. Settling your personal loan is not necessarily going to increase your credit score. Making the payments on time is going to affect your credit score. The age of accounts, actually, account more than just settling your accounts. The longer you pay, the more your credit score will increase.

Justin Harrison 38:13
Ja, 100%. Okay. So, “I have paid two clothing accounts that have reduced my credit score by 9 points. I would have thought that closing the account would increase my score?” This is a fantastic example. Dawie, I will take this one quickly. This bears testimony to what we've been saying, right. So, very important, is to show that you're a good financial citizen, that you are lending and borrowing within your facility 30%, right. What a lot of people don't realise is that if you don’t use a lot of debt, for example, if you have one or two accounts or a couple of accounts going and you're fairly responsible with those. Removing those off your profile can actually harm your profile, in the short term. So, you may see a reduction in the short term and the reason for this is because there is less track record. By having accounts, and staying within the utilisation ratios and making the monthly minimum payments, you are showing a track record. We always advise people, when it comes to closing accounts and what not, just think very carefully about the account. Sometimes, to put your credit score up there, it does make sense to work with your accounts in a smart way. A great example of this, Dawie and it's not directly related, but on FNB banking, on some of the banking plans, you get 30-days interest free on your credit card. And sometimes it makes sense to keep some money that you would have spent of your chequing account, rather spend off your credit card; earn interest on your money, within your cheque account right and then, at the end of the month, just settle the amount that you would have spent anywhere, out of your cheque card. And what that's doing is, it's helping show that you're a financially responsible citizen because you've used some debt, you've got some debt utilisation, you've got a profile, you've got some history, and at the same time, you’re making yourself some money.

David Bester 40:18
100%. I use that as well just to get FNB eBucks points. It's a really easy way of getting free money.

Justin Harrison 40:25
Ja, absolutely. “So then, what do you do to get your score back up when you’ve settled the debt that initially got your score down?” Dawie, you can take this; that's actually a really good question.

David Bester 40:41
So now you have to start building up some age on your accounts again. You basically, have to prove to them that, okay, yes, I did default but I’m rehabilitated now, and I can repay my accounts on time, and I've been rehabilitated. Now you have to start doing it again. Like I said, easy accounts, such as telephone accounts or insurance, those things also show up your credit report and just keep paying them, follow best practices, reduce your credit score utilization to under 30% and yes, that's the easiest way of getting your score up. Then, just stick to the process: check your score every month; make sure that there are no errors on your report; make sure that your score doesn't drop; and just check that what you are doing, is actually improving. And then, over six months, you'll see your score start going up again.

Justin Harrison 41:31
Absolutely. Feroza Daniels wants to know: “How do I become a member?” It's really simple. If you go to mycreditstatus.co.za - I'm actually going to put the address up on the screen for you, right now; mycreditstatus.co.za. Go there, fill in the form, you're going to be asked some security questions. What our system does, it goes and checks you at home affairs, it goes and checks a couple of questions, that will obviously make sure that we’re matching the right profile with the right person. We have a 100% accuracy rate. We are 100% secure, so your information and data will never be shared with anyone else. Go to mycreditstatus.co.za, you have, basically, three options when you hit our site: you can take a score only; alternatively, you can take a once-off report, which will give you a full report with everything you need; alternatively - and this is the one I recommend, which is the cheapest option - and we suggest that you go that route because you get a report every single month, you get a whole bunch of education and training around, not just improving your credit score but also financial education, and you get access to templates, documents, budgeting tools. There's just so much stuff in there. We even have a financial assistance line, which you can contact, if you have any specific financial questions. There's a lot of benefits to being a member, and it's really simple. mycreditstatus.co.za and if you have any problems, please just email us at [email protected]
Okay, Dawie, you may want to take this one. This is a really good question that I saw come through. “What's your take on a score of 652 and a high utilisation?” – this comes from Lovemore.

David Bester 43:16
Okay, so 652 is already pretty good but if you sort out your utilisation rate, you can easily get a great credit score. So, if I were you, I would sort out that utilisation immediately, because what this allows you to do is, if you've got a great credit score, to what you've got, which is most probably an average credit score is, the difference in interest rates that you'll be offered. Now if you go apply for finance with an average credit score versus a great credit score, you'll get a better interest rate. That better interest rates will save you 1000’s and 1000’s over the long run. I did the calculation the other day; it was on a home loan of R1 million over, I think 20 years. You end up saving over 400,000 over the term of the loan – 400,000, just about the difference of two interest rate points. So yes, if I were you, I’d go sort out that high utilisation immediately.

Justin Harrison 44:11
Absolutely. What people don't realise is, you can actually have a high credit score, and still have an imbalance in your credit utilisation ratio because of a lot of other things, maybe you make your payments on time, you've got a long-standing account history. A lot of those things will count in your favour, but if you've just got one thing to fix, which is your utilisation ratio, and that one thing is going to give you right up to the maximum number of points on your credit score, you've got to be crazy not to do it. Just on a couple of percentage points, you can save a lot of money over the long term.

I love this person's name by the way: ‘Mission Possible’. I absolutely love it. ‘Mission Possible - I think I'm going to steal this! ‘Mission Possible’. “In my credit report, there are addresses and phone numbers that I don’t know. The other one in Switzerland. Is that affecting my score, as well as so many addresses and phone numbers?” Dawie, you can maybe answer that for us.

David Bester 45:09
Okay, no, that doesn't make a big difference in your score. If there's a lot of addresses, in a very short amount of time - so let's assume five addresses in one year - yes, that might affect your score a little bit. But if it's over a certain time, then it doesn't really matter; it doesn't really affect your credit score. For me, I had a bunch of different addresses but it was mostly the same address, it was just felt different differently. That's probably my obsessive behaviour but I had it disputed and I had it removed and I removed all the duplicates. If it bothers you, just dispute it with a credit bureau and they'll remove it for you.

Justin Harrison 45:49
I just want to do a follow up on one of Lorraine's comments and questions that came through earlier, before I tend to Collen’s question. Lorraine says: “It’s been over six months that I’ve closed off the accounts but the score is still low, and I've tried to keep the record clean since then, hoping it will improve but nothing is happening. What do I do now to improve my score?” So, it's very hard to answer this question specifically, Lorraine, without having a look at your personal credit profile and your personal credit report. But what I will say to you is, having closed accounts, having to try and keep a clean record, that's all really good, that's great, but you need to understand the numbers behind things. Absolutely, you need to look at the account histories and the lengths of the accounts that you still have available; you need to look at your debt utilisation ratios on other things that you've got on your profile; you need to look at the accuracy of things on your profile. So, you really need to take a look at all of those things combined, to ultimately know, why your score isn't improving. The most common reason why people don't see their scores improve really comes down to two things: incorrect listings is number one. Number two is account history. Make sure that you've got a good payment history. If there's anything that you may be skipped a payment on for a month or maybe paid a couple of days late, that could be bringing your score down. You really need to go back into your profile, and just have a really close look at things. Dawie, do you want to take this one?

David Bester 47:28
Ja, sure. “I need assistance taking on my bank regarding my home loan. If I sign up for a membership, can you guys assist in this regard?” Well, if you take up a membership with My Credit Status, we can give you as much information as we can. We've also got an exclusive Facebook group, where you can ask as many questions as you’d like. We've got a financial hotline, where you can ask for any banking advice that you'd like. The only thing we can't do is, we can’t phone the bank up for you. Unfortunately, it's like asking for us to give your credit score on WhatsApp; we're not allowed to. You physically have to talk to your banker, because you need to verify your identity, obviously. So, yes, if you want to go to the bank, you will need to assist the bank but we can assist you as much as we can. We can offer you all the information you need. As I said, we've got the 24/7 financial hotline, where you can, not only ask financial questions such as banking advice, but you can even ask us, tax advice if you wish.

Justin Harrison 48:23
Ja, that financial assistance line, I mean, our consultants on there, are trained financial advisors; anything from tax to banking to loans. So, once you are a paid subscriber, member of mycreditstatus.co.za, you have 24/7 access to that line.

Dawie, the next question comes from Henry Jacobs and he says: “I need some help to find my credit scoring. I was under admin, paid off all my debt, cancelled admin and debt review. I currently have a Woolworths account, which I pay regularly, but they say I must open accounts, please help?”

David Bester 48:59
Okay, Henry, well done for paying up all your accounts and for getting out of debt review. You’re basically starting off on a clean slate. So, as we said, it takes a bit of time before your credit score starts increasing again. I wouldn't make any sense again. If I were you, I would just regularly pay my insurance bill or get a Telkom account, just pay the Telkom account and that is more than enough. Your credit score will start increasing over time. You've already got the Woolworth’s account, which is one; if you add another one or two, then your credit score will increase. As I said, I've got two accounts and a credit card and I've got a perfect credit score.

Justin Harrison 49:35
Absolutely. So Dawie, we have run to 50 minutes. I think that's all we've got time for this evening, in terms of questions. If we did, by any chance, miss your question or miss your comments, please feel free to write to us at [email protected] and… Actually, let's quickly answer Collen's question. My apologies, Collen, I clean forgot about you. Dawie, let's quickly do this in the last couple of minutes we've got left.

David Bester 50:06
Sure.“In a situation whereby, a creditor is not appearing on your credit report. In case you apply for a bond, house or buying a car, what impact can that have on your application? E.g., rental cars that offer blacklisted client services.” I’m not sure I fully understand this question.

Justin Harrison 50:24
I'm assuming - just quickly correct us in the comments, if we're not understanding you but - I believe that you may have an account or a loan out there or something, that is not actually listed on your profile and your question is, how will that affect you? If that is the case, if it's not in your profile, well, then nobody's going to see it. And that's an important thing to know. Not every institution actually does report its data into a central database for the credit bureaus. If there's an instance, where something isn't on your profile, that should be there, in terms of an account, if it's doing more harm than good to your profile, I would just leave it.

David Bester 51:09
I’m assuming that Collen wants to get a car because he's talking about car finance and he’s talking about blacklisted client services. Collen, the only thing that is basically offered to blacklisted people in that regard is, rent-to-own. So, you rent the car with the option to own it at the end of the term, then you can take over the car for yourself. That is what they mean by helping blacklisted clients. If I'm assuming that you say, that you applied for a bond and a car and a few other things, yes, credit inquiries account for about 10% of your credit score. If you apply for a bunch of things, often, and in a short space of time, then it's going to impact your credit score a bit. You must wait it out, and things will go back to normal again, eventually.

Justin Harrison 51:58
I hope that answers your question, Collen, and if we didn't get your point completely, please either write to us at [email protected]. Alternatively, if you do become a member of My Credit Status, we have a Facebook group, which is exclusive for members. You can chat to Dawie and me on their directory, as well as a lot of the other members and support staff at mycreditstatus.co.za. We strive to help everyone as much as possible. We don't just want to give you your credit reports; we don't just want to give you a credit score; we want to give you financial freedom, financial independence. And the best way to start is, really start looking at your habits, looking at your financial profile, and really fixing that, in the grand scheme of things, and if you do that, you'll be on a much better footing.

David Bester 52:49
Guys, while you are here, please like the page - that will allow you to get notifications when we do these live Q&A sessions again, which we will do pretty soon, probably in the next week or two. Please remember to like the Facebook page and you will get the notifications when we go live and you can ask us questions live here on Facebook again. Alternatively, also go to our YouTube channel; we have a webinar every two weeks. On there we share a bunch of personal finance steps, and there's a lot of things when it comes to improving our credit scores. We actually have webinars, showing you, in detail, how to do disputes with the credit bureaus. So, make sure to check that out and also subscribe to that channel on YouTube.

Justin Harrison 53:39
Absolutely. Thanks so much for your time, guys. I hope that we've helped you a little bit, this evening at least, and until next time; hamba kahle, sala kahle, tot siens, see your soon.