Credit Bureaus: Removal of adverse information

Effective as of 1 April 2014, all credit bureaus will automatically have to remove any negative information on the credit records of consumers. This comes after the Minister of Trade and Industry, Rob Davies, released the regulations for the Removal of Adverse Consumer Credit Information last month. The adopted bill is likely to be signed into law within shortly. This means that consumers will have negative information wiped off their profiles in the period between 1 April 2014 and when the bill becomes law which is anticipated to be in May.

The regulations form part of the National Credit Amendment Bill (NCAB) which aims to address shortcomings in the National Credit Act (NCA) regulating the industry. Consumers with judgement relating to paid-up accounts will continue to have this information removed from their profiles on an ongoing basis. They will not have to spend money on legal fees and go to court to have a judgement rescinded.

Financing by way of credit (Photo credit: Tax Credits)

However, the removal of adverse information on consumer profiles is not to be confused with the removal of debt. It is only the negative information that will be removed and consumers will still be liable for the debt. The credit profile will still show a credit provider whether payments have been skipped when they do their risk assessments.

All lenders will now have to register and a code of conduct will be drafted for the credit industry.

Many believe the removal of adverse information from consumer credit profiles to be a controversial piece of legislation. Most probably, credit providers will become more stringent on the lending criteria.

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