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What is a credit bureau?

Posted: 08 Mar 2023

2 mins to read

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The main function of credit bureaus is to protect consumers from reckless lending and over-indebtedness.

Understanding the role of credit bureaus in South Africa

A credit bureau gathers, stores, and reports credit-related financial information of consumers that includes successful applications for credit or services on credit, such as loan agreements, credit cards, store cards, insurance products and cellphone contracts.

Reporting this information allows a prospective lender to be aware of all the credit agreements that the consumer has. It also shows them how well the consumer has conducted the repayment under those credit agreements. Lenders use this information to help them make an informed decision in terms of affordability (can the consumer afford what is being applied for) and creditworthiness (how likely is the consumer to honour the payment on what is being applied for).

Experian, one of the largest credit bureaus in South Africa, is a registered credit bureau with the National Credit Regulator (NCR) in terms of the National Credit Act (NCA), NCR No: NCRCB16.

For a full list of active credit bureaus in South Africa, visit the NCR's website here.

Credit bureaus play a role in a lender's decision to extend credit or a service provider's decision to provide access to post-paid services. Credit bureaus provide information about an applicant's credit profile to credit providers and service providers. Credit providers and some service providers use this information as part of their decision process. This information, combined with their business rules and an affordability check, determines whether a loan or access to services is approved or declined and may even impact the pricing of the service.

Credit bureaus also compile credit reports along with credit scores. A credit report is a document that documents all credit information showing how a consumer manages and repays the credit given to them.

While most major credit bureaus serve the industry as a whole, in South Africa, there are some niche credit bureaus that serve specific markets; for example, there are bureaus that focus on the risk associated with tenants for rental properties.

Getting your Experian Credit Report and Experian Credit Score

All credit bureaus in South Africa provide South African consumers with a free credit report every year as required by law.

Experian South Africa offers South African consumers unlimited full free Experian credit reports and their Experian Credit Score. We offer these via My Credit Check.