Definition of the week: ARREARS Arrears refers to an amount of money that is owed, and that should have been paid earlier, for example a default payment. If you were meant to pay your credit instalment at the beginning of July, and by September have still not made the payment, your account will be over two months in arrears.
Consumers often ask why an account shows as being in arrears on their credit report, even after they have paid the default amount. The National Credit Act and Regulations state that a credit provider must notify the credit bureaus as soon as all arrears are settled. The credit bureau then has seven days to update your credit record. Your credit record needs to be updated after you have paid up your debt in full, so that any adverse information can be removed from your profile. Adverse information is negative information, which can be seen by third parties who do a credit check on you. Adverse information relates to your credit behaviour and classifies any actions taken against you by credit providers. Examples of adverse information include: • Delinquent payer • Default • Slow paying • Absconded • Not contactable • Handed over for collection or recovery • Legal action • Write-off Visit www.mycreditcheck.co.za to see whether there is any adverse information on your credit report. Remember, you have the right to receive one free credit record every 12 months. Helpful Hint: If you have checked your credit report and you find adverse information on your profile after you have settled all your amounts in arrears, you can contact Compuscan directly to dispute the information. Compuscan’s national number is 0861 51 41 31.
This brings us to the end of our series on the dangers of defaulting on your credit payments.