Johannesburg – Many South Africans have had their finances squashed since the outbreak of Covid-19. A recent Debt Rescue study shows that 34% of respondents lost their jobs, with 22% being retrenched and 17% receiving a pay cut.
The results are based on feedback from 1 300 South Africans who were polled online in March and April. Debt Rescue conducted some research among their clients.
To help them cope financially, of those who dipped into their bond or savings, 36% used the funds to pay for day-to- day expenses, 10% sold some of their assets while 30% turned to family and friends for help. Inevitably, landlords and tenants alike have been affected due to income loss.
Many consumers have had their credit records impaired.
Tenants and potential home buyers are asking themselves a few questions: Is it possible to repair your credit record and get that dream rental home?
Are dreams of getting a bond in the future permanently dashed or can they be rescued?
RentMaster CEO Shanaaz Trethewey said to get a bond or rent a home, a good credit score is part of your evaluation and is unavoidable, even if the circumstances you had were out of your control.
A specialist rental payment credit bureau, called TPN, records a tenant ’s rental payment data and when combined with other credit data, a more complete consumer profile can be seen.
This means that, if you pay your rent on time every time, it has the same positive impact on your credit record as any other credit transaction.
Trethewey provides some simple rules to improve your credit record.
Accessing credit is extremely difficult once a credit provider sees a non-payment history.
No service provider, financial or otherwise, wants to extend terms to a consumer that has been reported not to pay.
Remain within your means Reevaluating your affordability bracket and sticking to it can help remedy your stress levels and credit profile over time.
Communicate with your collection agent Communicating if your income terms have changed immediately with your landlord and rental agents will allow them to adjust the invoicing and collection in a way that will help everyone cope with the change in a proactive and mutually positive manner.
Keep the administrative stress to a minimum Using a debit order helps to take the manual time, cost and process out of the payment cycle and helps ensure that you are not subject to interbank processing delays, which are out of your control, that may still land up on record. Be transparent with your landlord Trust is the foundation of all good relationships.
Showing proof of income and surety, and prioritising your rental by proactively communicating any issues, all assists in building transactional trust.
Alternative lending data
Consumer credit reporting company Experian this week said that customer credit profiles are drastically changing and “business- as-usual” strategies will no longer be sufficient in predicting future credit performance and extrapolating loss events based on observed payment performance.
Jaco van Jaarsveldt, the chief decision analytics officer at Experian Africa, said the devastating economic impact of Covid-19 has created a much tougher lending environment for credit providers that now needs to go far beyond traditional criteria when assessing risk and modelling future. What are the pros of using alternative credit data?
• Many people face barriers to accessing credit. Some have trouble documenting their income. Others have either no credit history or a credit history that is too scarce or “thin” to generate a credit score.
• Alternative credit data can provide insights on an entirely diff erent consumer population not on the traditional credit fi le by assessing other behavioural aspects.
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