Advice and Opinion

Credit Amnesty confusion

There has been much discussion and confusion about the Removal of Adverse Consumer Credit Information Project, which came into effect on the 1st April this year and many thought the “slate was wiped completely clean” and rental agents or landlords may have been concerned about prospective tenant checks not showing the information needed to make an informed decision about whether the prospective tenant was suitable, says Gail Cawood, rental manager for Knight Frank Residential SA.

This system is very clearly there, however, to assist those who have negative information on their credit profiles but have made every effort to pay off their outstanding accounts, said Cawood.

Many thought they had to apply for amnesty but this is not the case, and the terms of the amnesty would automatically apply to any paid-up judgement or negative information listing prior to April 1st. As of 1st June, paid up judgements will be removed from credit bureaus’ records whereas in the past they were on the system for five years.

The amnesty does not, however, remove the consumer’s obligation to repay their debts which is what some people thought, said Cawood.

Landlords and rental agents depend on the credit profile information to check whether prospective tenant’s payment behaviour is positive or negative and, while many may have not been blacklisted, there is other behaviour which sends warning signals, she said. Tenants who pay their accounts on time and in full will always be preferred over those who make partial payments, pay late or ask for grace periods continually.

Another warning sign is if, on going through their credit profile, it can be seen that they have had numerous addresses for short periods of time each over the years, which indicates instability.

“While previous judgements or poor payment records will have been cleared, this does not mean that there will be no record at all and landlords or agents will still be able to check current bank statements to track spending patterns. If one looks at a six month period in any given time frame, it’s quite a good indication of the way the person runs his financial affairs,” said Cawood.

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