The South African Credit Information System

This presentation provides an overview of the South African Credit Information System, describing the following characteristics:

• Voluntary information sharing;
• Application of the principle of reciprocity;
• Use of sophisticated scoring models;
• Full-file credit reporting, where both positive and negative information is shared;
• Fixed and reasonable data retention periods;
• A legitimate and non-judicial dispute resolution mechanism that resolves disputes between consumers and credit bureaus or their subscribers;
• The code of conduct within which credit bureaus operate.

The presentation:

• Identifies the role-players in the South African Credit Information System;
• Outlines the following functions of the Credit Information System:
  • Improving risk management,
  • Enabling lenders to increase the amount of lending,
  • Reducing default rates,
  • Assisting borrowers in developing credit profiles,
  • Preventing borrowers from becoming over-indebted.
• Outlines how the system operates;
• Lists the sources of public and private information.

The presentation concludes by listing the main characteristics of a Credit Information System as follows:

• Collecting data from various sources;
• Offering voluntary, extensive full-file information sharing;
• Having scoring systems that categorize credit applicants into risk classes;
• Following the principle of reciprocity;
• Operating within a clearly defined framework of good practice principles;
• Having mature private credit bureaus that are not subject to statutory limitations.