In a day and age where consumers are swamped with bad credit in South Africa, it is important that credit providers take the necessary steps to ensure that they do not offer credit to anyone unless they perform a credit assessment on the consumers’ affordability.
Since the National Credit Amendment Act came into full effect in March 2015, credit providers are obliged to verify what you as the consumer ear. The amendments to the NCR is held at a higher level of protection for consumers in the credit market. What are these changes?
It is mandatory for credit providers to perform an affordability assessment before extending credit to a consumer. In terms of the new amended Act, consumers are required to provide credit providers with detailed information about their income and expenses.
A creditor must:
- Check most recent pay slip or bank statement to ensure the consumer has an income.
- Calculate a consumer’s discretionary income;
- Take into consideration the consumer’s monthly debt-repayment obligations in terms of credit agreements;
- Take into account a consumer’s maintenance obligations and other necessary expenses.
The amended Act also states that credit providers must take into account your debt-repayment history. All this will assist you to not be over-indebted in the future and to keep your credit score squeaky clean.< Back to FAQ's