Why Am I declined Credit?

The Decision to Approve or to Decline credit application is not solely based on Your Credit Profile

It is worth knowing that every Credit Provider has their own risk assessment or risk management policy or systems, which are also known as scoring. As such, the decision to grant or decline an application for a loan or credit facilities is not solely based on your Credit Profile or Credit Bureau Score, but the credit provider's unique scoring system,  though checking your Credit Profile is compulsory and legally binding as per NCA.

Design with Ease

“A good financial plan is a road map that shows us exactly how the choices we make today will affect our future.”

The Myth of Credit Bureau Score

First you need to understand that each Credit Bureau is an independent entity and credit bureaus do not share information voluntarily unless instructed to do so by the National Credit Regulator under whom every Credit Bureau is registered. That being the case, each credit bureau uses its own tools to allocate your profile a score . There is no standard or prescribed or universal scoring system that is used for allocating a score. A Credit Bureau score is similar to an opinion rather than fact. In other words, you, like all credit providers,  should not concern yourself with the score displayed on any credit bureau profile as it simply will not guarantee or discourage access to credit facilities. When a Credit Provider mentions score after assessing your credit application, they simply refer to their own internal risk management score, not the credit bureau score. 

Section 62 of the NCA.

Right to reasons for credit being refused

• On request from a consumer, a credit provider must advise that consumer in writing of the dominant reason for:-

• Refusing to enter into a credit agreement with that consumer;

• Offering that consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit under an existing credit facility;

• Refusing a request from the consumer to increase a credit limit under an existing credit facility; or

• Refusing to renew an expiring credit card or similar renewable credit facility with that consumer.

• When responding to a request in terms of subsection (1), a credit provider who has based its decision on an adverse credit report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

•  On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.

• The logic behind this regulation is to assist the consumer to know what exactly is affecting his chances to obtain credit facilities or loans so that they can work on repairing the negative elements. Failure to supply this information to the consumer is a violation of the consumer rights and also a transgression of the law. The consumer should report any credit provider who does not comply with this regulation to the NCR. www.ncr.org.za

“A good financial plan is a road Map"