How to Get and Fix Your Credit Report

Do you know your credit score?  Here’s how to check your credit report.

Most consumers find that their credit score and credit reports remain a mystery. We generally find this when we do our Financial Journey workshops and assessments for debt review. For most consumers, this mysterious credit report is only for the privilege of a creditor when one applies for credit.

This is not so. This is your credit report. It belongs to you. Your credit report is YOURS.

image of the word, credit report

Debunking the term “Blacklisting”

Before we discuss how to get your credit report, let’s debunk one of the biggest myths about credit scores: the term ‘blacklisting.’

“Blacklisting” is a term coined by creditors themselves. The awful sentence “you are blacklisted” must sound like a death-knell. It leaves you with thoughts like “I will never be able to buy a house, own a car or obtain a credit card.” When you find out that you’re “blacklisted”, even applying for a mobile phone contract seems impossible.

In reality, “blacklisting” does not exist. You are not on a “list.” Simply put, your credit history has been recorded on your name and not on a list. Perhaps you went through a dip in your finances or went through an irresponsible period and did not pay regularly on one of your agreements for some time.

Creditors send through lists to the credit bureaus every month. These lists consist of clients who have paid and those who have not paid. The credit bureau updates the individual’s credit report with that information.

From the above, it should become clear that you are not, in fact, on a “blacklist.” You might, however, have some red flags in your own, unique credit report which will need your attention if you want to maintain credit health.

If your credit report requires some remedial action, you will want to know what can be done to fix it. So let’s move on to getting and understanding your credit report.

How do you get your credit report?

There are several credit bureaus. You can view them by clicking here. Choose one, and contact them to ask for your credit report. You will need to answer several questions before you can proceed. These questions are to verify your identity, and to make sure that it is not a third party trying to obtain your credit report. Only you or an authorised entity may access your credit report.  You may have to provide a copy of your ID and proof of address.

Understanding and Interpreting your credit report

Once you have your credit report in front of you, how do you analyse it? 

Information on your credit report contains personal details such as your name, identity number, a history of Telephone numbers, addresses and employer history.

Next, it will show you a list (if any) of defaults, judgements, or accounts handed over to a collections process.

After that you will see a graph of total debt and total monthly debt.

Then you will see a summary of your creditors – both open and closed accounts.

Finally, you will see a detailed list of creditors – both open and closed accounts – for a period of 2 to 5 years, depending on the type of credit agreement. This is the part of the credit report that should hold your attention.

Above each creditor you will see blocks representing months or years of history of payment. You want to see lots of green, meaning that accounts are up to date.  Where you see orange or red blocks, this is what is affecting your credit score negatively.

How to fix your credit report

So, what can be done? Firstly, ask yourself why you can’t or won’t pay the accounts.This is sometimes tough because you also have a household to take care of.

We find that the debt review principles work well in the process of catching up or fixing past mistakes. 

This is how it works:

Take some paper and write down all your living expenses. You can download our free budgeting tool to help you with this. Add up your living expenses and subtract that from your income.

What is left over should be enough to cover your commitments to creditors.

Add up your monthly instalments payable to creditors. This should be equal to the amount left over after your living expenses were subtracted from your income.

What if it is not enough?

Revisit your living expenses – is there anywhere you can cut down?  Bear in mind that you have a contract with your creditors to pay off your debt with a minimum payment.

If you really can’t cut down your expenses, you should consider debt review.

Debt review is not a permanent thing.  It allows you breathing space, at a reduced instalment, reduced interest rate and extended term.  Once all your debt has been settled, we will issue you with a clearance certificate and your name will be cleared on the credit bureaus.

Then you can continue with new credit agreements, hopefully with more thought given to what agreements you will enter into and keeping your creditor commitments within an affordable repayment.

Cape Debt Clinic has helped many people to plan their financial goals without the use of debt review, but using the debt review principles.  This process really works.  You need to be patient, be willing to adjust (for a while) and before long you will reap the rewards of a new financial discipline.