House-hunters: Beware of "credit rescue" services
How to fix problems yourself, for free

Many house-hunters can't buy their own home with the help of mortgage finance from a bank because they don't have a good track record of repaying their debt on time and in full each month. Caroline Buthelezi of the office of the Credit Information Ombud spells out the facts about negative credit bureau listings and how you can help yourself to get rid of a major obstacle between you and home ownership.

You see posters on street poles. You may even get calls from telemarketers offering ‘credit repair' or ‘credit rescue' services. They all make the same claims:

  • "Credit problems? No problem!"
  • "We can erase your bad credit-100% guaranteed."
  • "Create a new credit identity-legally."
  • "We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!"
  • "Get off the blacklist"

Do yourself a favour and save some money. Only time, a conscious effort, and a discipline debt repayment plan will improve your credit report.

The office of the Credit Information Ombud (CIO) is an unbiased organization that assists consumers and businesses to resolve disputes about negative credit bureau listings which consumers believe to be invalid and incorrect. In addition, as a not for profit organisation we do not charge for our services. If you apply for credit and you feel you have been declined because of unjustified negative information held at the credit bureaus, and you have attempted to resolve this with the bureau to no effect, then you can apply to the CIO for assistance. The services of this office are free of charge.

Everyday, advertisements appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, there is nothing they can do that you cannot do yourself - often for free. The only time that you need the assistance from an attorney is if you want to rescind (remove) a court order (usually a judgment).

The Warning Signs

If you decide to respond to a credit repair offer, beware of organizations that:

  • Want you to pay for credit repair services before any services are provided;
  • Do not tell you your legal rights and what you can do yourself - for free;
  • Recommend you do not contact a credit bureau directly;
  • Advise you to dispute all information in your credit report without having verified the validity of such information with your credit providers.

The Truth

The office of the CIO is committed to protecting the consumer from being fooled by unrealistic promises made to them. No one can legally remove accurate and timely negative information from a credit report. But you can request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. Everything a credit repair organization can do for you legally, you can do for yourself at little or no cost. If your application for credit is denied because of information supplied by a credit bureau, the company you want credit from must provide you with that credit bureau's contact details and you can take steps to rectify the information which you feel is incorrect or invalid.

The Process

  1. Obtain your credit report from the credit bureau - this is the first step. Without this you cannot see what may be wrong, nor can the CIO intervene until credible evidence has been presented.
  2. Lodge a complaint with the Credit Bureau specifying which information you are disputing on your report, and get a reference number - they have 20 working days to get credible evidence of the information on your credit report - at this stage the information in dispute MUST be removed from your record. (it may be returned later if proven to be valid)
  3. If, after 20 working days, you are still disputing the record, you may lodge a complaint with the CIO Call Centre 0861OMBUDS (0861 662837/ www.creditombud.org.za) using the same bureau reference number. At this stage the Ombud will thoroughly investigate all aspects of the case calling for written records and proof.
  4. The Ombud will rule - this can be instantaneous or prolonged depending on the available evidence.
  5. If the Ombud rules against you as the credit receiver, the disputed information will be relisted. If he rules in your favour, the information is expunged from your credit profile.
  6. Should all of this still fail your satisfaction, you may then appeal to the National Credit Regulator.

Do-It-Yourself Check-Up

Even if you don't have a poor credit history, it's a good idea to conduct your own credit check-up, especially if you're planning a major purchase, such as a home or car. Checking in advance on the accuracy of the information in your credit report could speed the credit-granting process.

Credit Bureaus charge approximately R20 for a credit report, however note that as per National Credit Act you are entitled to one free report per year.

Some Credit Bureaux Contact Numbers:

Experian: 0861 10 5665
Transunion: 0861 482 482
Kredit Inform (Business enquiries): 011 777 2700
XDS: 0860 937 000
Compuscan: 0861 514 131

As you can see, the Credit Information Ombud's office can assist for free when it comes to disputing incorrect and invalid information on your credit report at the credit bureaus. Everybody is going through the credit crunch, so let us be wise and take extra care with our money as consumers.

Article by: Caroline Buthelezi - www.realestateweb.co.za