How long can negative information show on my credit report?

Negative or adverse information refers to instances where you did not ...

Negative or adverse information refers to instances where you did not honour your credit agreements either partially or in full. It includes any negative classification on your report, such as: delinquencies, defaults, having absconded, slow paying, debts being written off, repossession of goods and being handed over for legal action.

The length of time adverse information can show on your credit report depends on how seriously the infringement is viewed by the credit industry.

Adverse classifications of consumer behaviour, which are subjective classifications of behaviour – such as instances of delinquency, defaulting on payments, being a slow payer, or repossession of goods – will remain on your credit record for one year.

Adverse classifications of enforcement action related to action taken by credit providers – such as civil court judgements, administration orders and sequestrations, and rehabilitation orders – have a five-year retention period.

The National Credit Regulator (NCR) has set time periods for how long negative information can reflect on your report. The table below gives you a full breakdown of these:

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You can find the full National Credit Regulations here https://bit.ly/33MZYSh.

Defining adverse information

  • Delinquent payers are those who regularly don’t honour their credit agreements, whereas to default means failure to pay an instalment on time or at all.
  • A judgment is a decision made by a magistrate’s court or high court. In credit judgments, the court will issue an order that gives the credit provider the right to collect outstanding debt. This could also include repossessing your household goods or even your home.
  • An administration order is a legally binding administrative arrangement issued by a magistrate’s court, which enables you to pay only what you can afford each month towards your credit debts. That is, after essential expenditure such as priority debts and general living costs have been accounted for.
  • Sequestration is the act of a court declaring a person insolvent and appointing an executor to attend to repay the person’s creditors.
  • Debt rehabilitation is a legal process where a high court relieves someone who has been declared insolvent of any legal repercussions of being insolvent, returning their legal status to someone who was never declared insolvent.

Avoid negative information on your credit report

A sensible plan is to not get into a position where adverse information appears on your credit report by always knowing where you stand with your credit accounts. Compuscan’s www.mycreditcheck.co.za offers free full credit reports, where you can find your account payment history, balance and instalments, which can help you better manage your finances.