Your offer to purchase your dream house has been
accepted – you just need approval on your bond
application;
You’ve test driven your dream car; you’ve signed on the
dotted line – and all you need is approval for your loan;
You’ve decided to splash out and buy the dining room
suite you’ve always wanted – and your HP application has
been sent through to the bank.
And then the response you never thought possible: your
application for financing has been declined.
For many consumers, being told that your application has
been declined due to a negative credit listing is unhelpful
as you are unaware of exactly what the issue is. Armed with
your credit report, you can now easily identify areas that
may be reducing your credit rating.
How does a lender make a decision about whether to
grant me credit?
When you apply for credit from a bank, retail store or
other credit provider, the credit provider will assess your
credit health – the risk you pose in terms of your ability
to repay the debt. Part of this exercise involves examining
your credit report as this reflects many of your financial
behaviours and habits.
The credit provider will then use the information in your
credit report to score your creditworthiness and decide,
based on their own criteria, whether or not to grant you
credit.
So, is the outcome of the decision based on the credit
bureau?
Only the credit provider with whom you applied for credit
can approve or decline your application and tell you why
it was declined. In the event that your application was
declined, you may request in writing, the reason as to why
you were declined. If it is due to an adverse report from
the credit bureau, (that is, an adverse listing on your credit
report), the credit provider must supply you with all the
necessary contact details of the credit bureau so that you
may request your credit report and find out where the
problem is.
It is important to note that each credit provider sets their
own credit assessment criteria and these will differ from
company to company and product to product. Over and
above the credit report, they measure your affordability by
comparing your income vs. expenses, information supplied
by the applicant (you) regarding employment details,
number of years at current residence, if the applicant (you)
owns a home, number of dependants, etc. So the final decision
as to whether you will be granted credit or not, rests
solely with the lender and their risk appetite.
Steps to improve the way lenders view our credit profile;
increasing your chances of being approved for credit:
An examination of your own credit report before setting
out to make a major purchase that requires financing could
therefore help you to avoid the disappointment, and embarrassment,
of being refused the credit you need.
Step 1: Obtain your credit report
You can get your TransUnion credit report by calling
061 227 142 or visiting our TransUnion office at 269 Independence
Ave Building, 1st floor, Room 116.
Step 2: Next, scrutinise your credit report
Ensure that all the information in it is accurate. If you have
any concerns about possible errors or discrepancies,
contact TransUnion Namibia so that this can be investigated.
Provide the credit bureau with as much supporting
documentation as possible – receipts or other evidence of
payment.
Step 3: Identity the negative information reflecting on your
credit profile
If you are certain all the information in your credit report is
accurate, identify any areas that could be counting against
you.
This could be nothing more “serious” than being a little tardy
in paying the amounts due on all your accounts in full and
on time every month. However, this type of slow behaviour
could count against you. Spend the next few months proving
that you have changed your behaviour by paying your
accounts on or before their due date and always pay the full
instalment. Of course, if you are one or more months in arrears
on any account, you must ensure that you rectify that
situation as quickly as possible.
Step 4: Double check and then apply
Then, after a few months, obtain another credit report and
ensure that it reflects your improved credit behaviour. If it
does, you should be able to apply for the credit you need
with greater confidence.
LEARN MORE
For more information about how TransUnion can help you
call: 061 227 142 or visiting our TransUnion office at 269
Independence Ave Building, 1st floor, Room 116.
