Rhys Dyer, CEO of ooba, South Africa’s biggest bond originator, tells you what you need to know:

  1. The Credit Amnesty’s full name is the “Removal of Adverse Consumer Information Relating to Paid up Judgments Regulations, 2014”.
  2. It requires that all credit bureaus remove all information on their credit records relating to paid-up judgements and all adverse information relating to consumers, such as “default”, “delinquent”, “slow paying”, “legal action” or “write off”.
  3. The Credit Amnesty was implemented on 1 April, and all credit bureaus have to be compliant by 1 June this year.
  4. From now on, credit records may only reflect late payments that haven’t been settled. All the other commentary will be removed.
  5. This doesn’t mean you don’t have to pay back your debts. It simply means that the level of detail previously recorded will no longer appear. So if you went through a difficult financial patch, but have now settled all your outstanding accounts, your credit record will no longer be affected.
  6. This will mean that the banks will have less information to go on when assessing your creditworthiness. Although only the banks know exactly how their credit assessments for home loans work, these detailed credit records would naturally have formed a large part of this decision-making process.
  7. You are entitled to run one free credit check through the credit bureaus each year. This year, you should request your free credit check after 1 June to make sure that the requirements of the Credit Amnesty have been complied with.
  8. Run your free credit check well in advance of house hunting so that if there are any negative notations against your name, you have the time to take action on them before you apply for a home loan.
  9. A free credit check forms part of ooba’s free home loan prequalification service “oobaqualified”. We will also work out your affordability and provide a prequalification certificate that shows the size of home loan that your bank will most likely grant you. You can find out more about this at www.ooba.co.za.
  10. To improve your chances of getting your home loan approved, keeping your credit affairs in order is still your best bet. Pay back all your lines of credit in full and on time to prevent any legal action being taken and blacklisting from occurring. If there has been any judgement against your name, pay it back in full. 

*Article credit: Ooba. Experts in home finance