Welcome to the 2nd article in our Fincheck MyFinance Tool series where we're unveiling some of the features ahead. This is a big step for us, but most importantly, for you! It's going to help many South Africans build a better financial future.
Before we tackle the 2nd feature, here's a little recap of where we are:
In November last year, we unveiled the Fincheck Credit Score tool with you and we've seen many South Africans use it since then.
We get inspired to do even more when we see how many people are being helped by this simple tool. Knowing your credit health is a very simple piece of information to direct your next financial step. (If you haven't received your credit score yet, get it for FREE here)
With that said, let's get back to the latest - the Fincheck MyFinance Tool. In this blog post series, we'll be talking about some of the features and how these features apply to your financial health. SIGN UP to stay tuned at the bottom of the page.
Why is this important for you to follow? Well, because this is not just another budgeting tool!
It's a tool that will allow you to see your financial health at a glance, and more in-depth (if you want to go there). Budgeting is only a very small component of that, and unfortunately the only core focus of too many tools out there.
In the previous post, we spoke about the Transaction / Cash Flow feature and how this applies to your personal finance. Today, let's look at one of the other main features of the Fincheck MyFinance Tool - Credit Scores and Loan Management.
This feature of the tool will build out on our groundbreaking Credit Score tool released in November. It will also show you what your total loan situation is. This includes valuable data like
- where you have loans
- your opening balances
- credit limits
- current balances
- loan types
- repayment periods
Why is it important to see all this data in one place? Well, it helps you to understand your financial health before taking out any further forms of credit or loans! We're here to help you make better financial decisions after all :)
This is an important step to help people get rid of their debt and start building a better financial future. So, even though the MyFincheck Financial Tool isn't there to help you yet - keep on cheering, we're almost there! - we've put together some valuable information to do it until then. This includes info from our latest posts on managing your debt and understanding your credit score tool.
8 Steps to the Debt Review Process
First up are 8 steps to help you understand the debt reviewing process. This followed on an article that explained a bit more about Debt Review itself.
1. Find a debt counsellor
It is important to not use the services of just any person offering to help you with your debt. To get the full protection of the NCA and to protect you against fraudsters, only use a debt counsellor that is registered with the National Credit Regulator (NCR). These debt counsellors are specifically trained, verified and approved by the NCR. You can verify whether it is a registered debt counsellor by checking their registration certificate. The certificate should have the NCR logo on it and should display the debt counsellors details, as well as their registration number. You can also search for a registered debt counsellor on the NCR’s website.
2. Give your information to the debt counsellor.
The debt counsellor will need the information below to best assist you in setting up a repayment plan
- ID document
- Details of your required monthly repayments
- Monthly budget of other expenses such as food, petrol and school fees
3. The debt counsellor will then calculate whether you are over-indebted.
Essentially, they will determine whether your debt repayments are unaffordable, taking in to account your current income.
4. Application and Fees
If the debt counsellor confirms that you are over indebted, you will then be able to officially apply for debt counselling. It is very important that the debt counsellor explains all the applicable fees to you at this stage and that you make sure you fully understand them.
5. Crunching some numbers
The debt counsellor will take the information you provided and do some calculations. He will calculate how much money you need for living expenses and what you can afford to repay every month.
6. Getting listed
The debt counsellor will contact the credit bureaus and inform them of the fact that you are under debt review. They will then list you as such to ensure your full protection. This is not like being blacklisted. Once you have repaid all your creditors, your name will be removed from this list.
7. Negotiating with creditors
The debt counsellor will contact all your credit providers to ensure that the information provided is accurate and to make double sure of the amount that you owe them.
This is NOT like a blacklisting – it’s a protection. It will be removed completely once you’ve paid everything off.
If all the credit providers agree with the repayment proposals offered by the debt counsellor, a legal ‘consent order’ will be obtained. (Often, this could mean a reduction in fees and interest payable by the consumer.)
This means that the terms have been agreed to and can’t be changed independently by any of the credit providers.
Should one or more of the credit providers not like the terms, the debt counsellor will have to approach a magistrate with the proposed debt repayments to get a decision. As long as the repayment plan is reasonable, the court will it will most likely approved it.
8. Reaching an agreement
Once an agreement has been reached, the debt counsellor will give you your final repayment plan and also submit it to a Payment Distribution Agency.
This agency will take a lump sum from you each month and split it up between the credit providers, according to the repayment plan.
Your obligation is to keep up the monthly payments until such time as the whole amount has been paid off.
We trust this has helped you to understand the process ahead if you are considering Debt Reviewing. As we mentioned in our previous post, here are a couple of companies compared on Fincheck for you to apply to:
If you need some more information to tackled your debt, we've got this great article from earlier this year - read 5 Steps to Get Rid of Your Debt in 2017 here.
Who Keeps My Credit Record - Is it Safe? How?
Second up - we know that many people are unsure whether their financial and credit information is safe with "all these online gimmicks". We want to assure you it is! Below we explain to you a bit more on where we get your credit score and who keeps the information safe!
Your credit record is safe.
There are many South African credit bureaus. Each of these institutions keeps a unique credit record of every South African.
3 credit bureaus in South Africa – among many more - are Experian, Trans Union and Compuscan.
Credit bureaus are independent institutions that make it their business to assist credit providers and customers in making fair and reasonable decisions regarding credit through credit record data. These institutions pride themselves on being honest and transparent. A credit bureau’s business relies on its reputation. So it is of utmost importance to them that they never lie about the credit reports they produce.
Be aware of the fact that the same person’s credit record report may differ slightly from one credit bureau to another. This is because the formulas used to calculate a credit score may differ. Don’t be alarmed. This difference will not make your good credit score a bad credit score.
Personal credit records are just the beginning. Credit bureaus keep the credit reports of businesses as well. These reports range over a wide scope of industries and types of loans.
The system of accounting of credit in South Africa is completely electronic. This means that as soon as a certified credit provider logs a transaction in its system it gets noted on the credit bureaus of South Africa’s reports. This is essential for the trustworthiness of the information these institutions supply to its members and customers.
Credit bureaus operate under the authority of the National Credit Act and are regulated by the National Credit Regulator.
The CBA – Credit Bureau Association – is a voluntary body that promotes fair and equitable services. They have 14 members. These members are credit bureaus that have to comply with the CBA’s strict code of conduct. This code of conduct is even stricter than the regulations set out by the National Credit Act. If a credit bureau isn’t listed with the CBA it surely doesn’t mean they are bad. But it serves as extra peace of mind knowing that those that are listed with the CBA are governed by strict regulations.
Research your credit bureau of choice and remember you have one free credit check for every 12 month cycle from your previous free credit check.
We trust the above steps and the Fincheck MyFinance Tool has inspired you to start building a better financial future with our help! If you have a moment, we would appreciate it if you can send this along to a friend that can use the above tips.
Sign up in the area below to continue getting posts like these in the weeks to come and SIGN UP FOR THE FINANCE TOOL HERE if you're to take control of your financial future.