Almost impossible for a payment defaulter to stay “under the radar”

Just how important it has become to maintain a clean credit record, if you wish to apply for a mortgage bond on a home, has been shown by figures recently released by the National Credit Regulator’s CEO, Nomsa Motshegare.

“If there is one aspect of the South African financial sector that is working with undeniable efficiency,” says Mike van Alphen, National Manager of the Rawson Property Group’s bond origination division, Rawson Finance, “it is the credit data recording systems. They are comprehensive and they draw on a very wide range of sources these days.”

These records, said van Alphen, make it almost impossible for a payment defaulter to stay “under the radar” – and, he added, banks and other loan organisations now make extensive use of the credit bureaux records.

“The National Credit Regulator has revealed that in the last year, no less than 394.4 million credit record enquiries were made to assess potential borrowers’ credit worthiness. This was a year-on-year increase of 27.1% and as South Africa has just 20 million credit active customers, it shows that virtually every new applicant is thoroughly credit checked. In the past it was sometimes possible to hide unpaid accounts and long-standing debts. Today that is increasingly difficult and, in fact, fraudulent.”

Van Alphen has, in a previous statement, said that National Credit Regulator statistics indicate that 47,5% of South Africa’s credit active clients have impaired records – but, in many cases, with the help of a good bond originator, these can be rectified without undue difficulty, “a factor of which many black listed clients are not aware”.