With so many different credit bureaus in South Africa, it may be difficult to decide which one to approach to access your credit report.
We have a look at what you should be aware of when selecting a credit bureau, and we find out whether intermediate organisations are safe to use.
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Choosing the right credit bureau
There are four main credit bureaus in South Africa; namely TransUnion, Experian, Xpert Decision Systems (XDS), and VeriCred.
Sbusiso Kumalo, chief marketing officer at African Bank, notes that these bureaus record all credit applications, agreements, and payment behaviour in South Africa.
“Your credit information – both positive and negative – is stored by the various bureaus, and they calculate a number, or score, to represent your creditworthiness,” says Kumalo.
He explains that this score represents the risk you pose to creditors. The higher your score, the more likely it is that your credit applications will be approved, and at a favourable rate of interest.
Once a year, you are entitled to receive your free credit report from each of the credit bureaus. When selecting a credit bureau, Kumalo says, you should be aware of two facts:
- Credit bureaus have individual scoring methods. A credit score from TransUnion ranges from 0 to 999, while a credit score from Experian ranges from 300 to 850. Although they look at similar factors, such as your payment history and credit enquiries, they weigh these differently when determining your score. This means that you may have a slightly better or worse score at a different bureau. However, this difference is usually marginal.
- Credit providers work with their preferred credit bureau. Creditors will not request your score from all of the bureaus; they usually work with a bureau with which they have a working relationship. They also have their own risk rules, which help them decide whether to grant credit to you. This means that some credit providers will assign 30% of their decision to your credit report, while others may only assign 20%.
With this in mind, you will be able to approach the right credit bureau for your needs.
For example, if you’d like to confirm your credit score before you apply for vehicle finance through a bank, you should reach out to them and find out which credit bureau they work with and request your report from that bureau.
On the other hand, if you would like to get a general idea of your creditworthiness, Kumalo recommends requesting your credit report from at least three bureaus. This will give you a good understanding of your credit status.
Is it safe to use intermediate platforms?
While the main credit bureaus gather information on credit-ready adults, there are also intermediate organisations that allow their users to access their credit reports on demand, and generally for free.
They are usually partnered with one of the credit bureaus, which supplies them with information that they then relay to their users.
Some banks also act as intermediaries. African Bank, for example, offers a free credit report, supported by TransUnion, to anyone who’s a South African citizen.
It’s completely safe to work through these intermediate organisations. However, it’s important that you do your homework first and make sure that you’re working through a trusted institution.
If you’re uncertain, you can reach out to the Credit Bureau Association and confirm the legitimacy of a credit bureau or an intermediate organisation.
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