 Good evening and welcome to episode 407 of the Private Property Podcast. I'm your host is Amandamwa Kumailo. It's a Friday edition of the Private Property Podcast, the very last Friday that we're going to be coming to you live in 2021. If you join us for the first time, you have been missing out on some great episodes tackling all things relating to property. Do make sure that you watch our Facebook or YouTube page to catch up on all the great episodes. Of course, you can go to Spotify, Apple Podcast or wherever you get your podcast from. And to all our regular viewers on Facebook, Instagram, as well as on YouTube, welcome to it. You know how we do every single week that you and I have an appointment at 7 p.m. We're always in conversation with a property expert who helps us make better property decisions. It doesn't matter where you are on your property journey, whether you're looking to buy, to sell, to build your tenant or your landlord, we're here to make sure that you've got the best insight, knowledge, tips and tricks to make your property journey a smooth one. And talking about making your property journey a smooth one, you know, that we also have a whole host of other incredible shows that you can look forward to across private properties, social media pages. As it is in Friday, I think it said Mondays because this was a public holiday. As it is a Friday, you can catch Chad on the Home Shopper Show and it comes to your screens every Fridays and Mondays at 8 p.m. And every Tuesdays and Thursdays on Balenoa, God takes you through the farming and podcasts tackling all things agriculture. And on Wednesdays, AC Class and takes us through the first time home buyers show. And of course, those are great shows every single weekday that you can look forward to at 8 p.m. The other thing that you can look forward to, of course, is a great competition that we are running and slowly wrapping up as we wrap up 2022. And in 2021, you see how I'm already throwing forward to the following year I'm certainly excited to see what that new year is going to bring. But before we jump the gun, let us of course close up 2021 on the right note. And the thing that you can look forward to is that great competition that we run on our Facebook page. We want to find out from you some of the great property insight expert advice that you have picked up from and share with it. Share it with us in the comments section. And you will stand a chance of walking away with five hundred grand's in cash every single weekday. And of course, if the lucky winner does not raise their hand and claim that price, the money keeps getting more and more in the money bag. Now, I know that yesterday I was not at the fort. You had a stand and present it, but you did have a winner for this competition. So we're back at five hundred grand's in the money bag. We'll see who this evening's lucky winner is. And of course, if they are watching us, all you have to do is drop us a message in order to claim your prize. Well, I'm wrapping up the week. I think this has been one of those very long, fast weeks. And there's a part of me that I've forgotten that today is actually a weekday because I thought it might be a Saturday and I think around 10, 11 a.m. I kept getting work calls and I had to remind myself that it's still a workday. And of course, that meant that later on this evening was going to be joining you. And we're going to be talking about something that you know, we talk about this time of year because we've done it before. We're looking at how to maintain a good credit score. It is the first season. So many things tend to happen when it comes to our spending during the festive season or even taking extra credit that we may not necessarily need. And all these things have a knock on effect on our credit score. And the reality is, as much as it is a big December, and many of us want to probably go big, the reality of the financial repercussions, especially when it comes to your credit score, that tends to be quite significant in the new year. So we're going to be looking at how to maintain your credit score, particularly during this festive season. What are some of the things that you also just need to do well, especially if you're going to have property ambitions for 2022 and as far as your credit score is concerned, things to watch out for, things to be on top of. And you know, some of the fraud that we're also seeing, how you can also make sure that you buckle proof yourself as much as possible against that and to help us get a good sense when it comes to all things credit score related. I'm joined this evening by Michelle Dickens, the CEO at TPN Credit Bureau. Michelle, good evening. And thank you so much for joining us on the show. I'm a lovely, always a pleasure to come and chat about property or credit or credit profile or just credit health and financial health in general. And I think, Michelle, one of the big things that I absolutely love every time we have a conversation is we make talking about our credit health very accessible because it is one of those things that people tend to struggle with. You know, sometimes you may have perhaps damaged your credit health and you think that you can repair it in two months, whereas the reality is you probably took a significant period of time to damage it. And I like the fact that we're even using credit health because it's one of those things. Sometimes our health takes a while to deteriorate and you're not going to fix it in a two day period or a two month period. And sometimes it can be very rapid and but fixing it still takes quite a significant amount of time. I think, firstly, before we even look at the net equities from a holistic level, what are some of the key things that we always need to bear in mind when it comes to keeping and, you know, keeping and, of course, maintaining a good credit record and making sure that we have a really good credit health? Well, I think the starting point is understanding where you are at the moment. So the first thing in terms of creating a positive credit profile for yourself is knowing the starting point. So what does your credit profile look like at the moment? And then understanding if there are areas that need to be worked on, what are those different areas and prioritising them? Because sometimes it can be too overwhelming to do everything all in one go. So it's about prioritising each individual item in your profile to create, to set yourself on a path to build a positive credit profile. And then that's exactly what it is. It's a path. It's not just I've done the work. I've got myself back into a positive or a good, healthy credit score. And then relaxing and shifting lifestyle. Credit health is a lifestyle. It's a lifestyle choice that needs to be maintained on a monthly basis. So maybe if I could, I'm just going to keep I'm just going to keep jumping in a long, if I can, I'm just going to keep fantastic. I'm just going to keep jumping in a long about step one, getting your credit profile. There's a number of different credit bureaus in the marketplace. I like to use my trance union, don't see it like today. It's online and you can access once per annual free credit profile. And this gives you a good indication of what's on your record at the moment. Once you've had a look at it, what most people want to do is they want to identify areas where there may be issues. So data that could be inaccurate. And that then takes us to the next step, which is we would log a dispute with the bureau at Trance Union and say, let's have a look at this information. Log a dispute with the credit bureau. This information is inaccurate. I'd like for it to be updated. This is such a wonderful tool because it means that consumers don't need to go and fight with each one of their credit providers. They don't need to go through a run around. There's a legislative process. It's 20 business days. You log your dispute with the bureau. The bureau will investigate on your behalf. So there's no cost or frustration involved from the consumer's perspective. The bureau's will then do an investigation. They'll get the credible evidence from the credit provider and they'll make a finding us to the accuracy. But it hasn't just stopped there. And you know, Michelle, when you talk about that, it actually remind me there was an issue that I also had in my own profile. There was an account that I had actually closed off years ago that was still showing on the profile. And you could see that it's closed, but it's still sort of reflected. And it should have, it was over two years old. And I had to literally say to them that this was closed. I think it was a good three, four years ago. It should not be reflecting on my profile. And they had made me an insurance company because I changed insurance companies. And so the old one was actually still in the system. And I obviously didn't want it to reflect because you don't want things that are no longer part of your profile to also be there. It was dealt with very quickly, very seamlessly. They said, you know, these are the things which it's like to send to us, send them through and within X business days. I can't remember how long it took to resolve it, but it really was a pain, you know, a painless process. And I think sometimes we don't know that we can do that. And more often than not, people also just, we don't take the step of checking what what is reflected on our credit profile. More often than not, by the time we see that it's when we're actually applying for a new line of credit and then we are told about, well, you're overdebted. And you think, but I don't think I am, as far as I'm concerned, but adequate debt for when we actually didn't see it. There are all these other things, some you may have already cancelled and some were probably even fordulently, you know, put on. How can we then best be on top of what is actually what the credit bureaus, what info they have on us and what kind of data is out there, whether it's inquiries or, of course, if you know, their judgments or whatever the case is. So it's such a lovely question, because the credit bureau environment doesn't stand still. It's changing all the time. So, for example, changing legislation, judgments, you know, if you get a judgment on your name, it's prescription is only 30 years. In other words, a credit provider can come and collect that debt for 30 years later. But the bureaus only store the information for five years. And that's because after five years, that type of information really shouldn't impact your behavior as to how you pay at the moment. So even though the credit provider can still collect on it, the bureaus retain only for five years. Change in legislation was, well, we shouldn't expect the consumer to go through a process through the courts to get a recision order, which is a costly order. That information should be removed as soon as it's paid up. And so there's change to the legislation with the National Credit Act to state that as soon as a judgment is paid up, a credit provider must instruct the bureaus within seven days to remove that data. Rehabilitation, right? It's rewards for good behavior. You've got adverse information. Adverse information used to sit on a person's credit profile for three years. Then it was two years, now it's only one year. Again, speaking to is the information the bureaus holding at the moment going to give relevant information as to how you're going to be paying your accounts at the moment? And again, the change in legislation was, well, an adverse listing stayed in your profile for three years. Now the legislation says an adverse listing is removed as soon as it's paid up. And again, some are talking to rehabilitation, rewarding, getting people back into the financial system, the credit system once they have rehabilitated their behavior. And then, of course, you've got your payment profile. And this is what I think that is the most misunderstood out of all the different types of credit, lines of data that the credit bureaus are holding. So the credit bureaus are collecting data every single month on every single consumer's credit agreement. Your payday loans, your vehicle loans, your store loans, store cards, cell phones, toll codes, insurance, etc. And what the bureaus collect every month is how is that account being paid every month? So what is the total value update that you've taken out? What is the value that's still outstanding? What is your monthly commitment? And then how do you pay that account on a monthly basis? This data builds up this wonderful analysis over a time series of how you pay your accounts. And this will help to devolve whether you're going into hard time. So you've been a good payer and now things are becoming a little bit more difficult or if you've had a difficult period, but you've actually rehabilitated yourself. And so this allows the bureaus and credit providers to weight the data. So the more recent the data is, the more it's going to impact your credit profile. And that's why when you spoke about it earlier, you think I'm going to clean up my credit profile in two days or even two months. It takes longer because you've got to get to a point where you're rehabilitating yourself from the bureaus and the credit providers who are going to be issuing credit are seeing that for the last six months, you've been able to maintain and pay your accounts on a monthly basis. It's not just about the negative information of the data, but it's also about your income. And I think this is where budgeting becomes so important. Your income is how much are you earning less? What is being allocated to debts? What is being allocated to household living expenses? Things like your rent, your school fees, your groceries, fuel for the car, transport, you know what I'm saying? Sixty eight percent of our salaries are spent on housing, on medical expenses, putting food on the table and transport. Sixty eight percent of our salary is gone, right? Budgeting is so important. And so once you've looked at your budget and you've identified that that you can spend on credit, credit providers are also looking over how much of that credit are you using? This is credit utilization. So we look at your credit facilities, your credit cards, your stock cards. What is the total value that you have outstanding? And how much are you accessing on a monthly basis? So you're going out, you've got, you know, a 20,000 grand credit limit or credit card and you're spending all of that. That's 100 percent utilization. You're going to be penalized for that kind of behavior. Whereas if you only spend 30 percent of the value that you have of those stock cards and credit cards, that's the kind of number that the credit providers are looking to see you utilize. And as that goes higher, it becomes more and more difficult for you to maintain full repentance of that. This evening, I am in conversation with Michelle Dickens, the CEO of the TPN Credit Bureau, looking at how to maintain a good credit score, especially during this festive season. And of course, in the new year, this is one of those things that has a knock on effect on different aspects of our lives beyond buying a property and even negotiating the interest rate. But also, you know, landlords typically also look at somebody's credit score and credit profile before making sure that they let you stay in their place, because I also need to check if you can, in fact, afford that place. We're going to go for a quick break. We'll be taking your questions, comments, related to all things credit score and credit profile related. We'll do this break. We're going to see who the lucky winner of the 500 grand that is in the money bag. And of course, when you come back, more questions, comments and looking at, you know, what do we then do? Especially right now during COVID, people who've been working a lot of contract work and not securing full-time employment. How do you also make sure that your credit score doesn't get negatively affected, given the nature of the work that you are doing? But in the meantime, let's have a quick break and see who the lucky winner of our competition is. And that lucky winner this evening is T.R.T. Munoz. T.R.T. Munoz, congratulations. 500 grand in the money bag this evening. I hope that you are watching. And if you are, drop us a message down here below in order for you to claim your prize. And we're back this evening with Michelle Dickens as we round up the week and certainly start getting ready for rounding up the year. You can look forward to an amazing episode that we've got lined up for you next week. I did say that, you know, there's something special brewing. I know that many of you at home are absolutely going to enjoy it. Do stay clear to our social media page. Just to find out what I am talking about, we're going to be letting you in on the great offer that we've got for that final episode that we are going to have next week. And I think one of the other things is I suddenly want to find out from you some of the things that you have picked up on the show and you can drop that on the pinned post on our Facebook page and that automatically has you entering a competition that we are running. Now to go to your questions and comments and some of the love that you're getting on our social media pages, tuned in Michelle Bomerance, happiness Malulika, Kuzor Ramusal is watching. Matashina is saying, get notifications on your profile. And that's a very handy tip, you know, that means whenever a credit provider looks into your profile or somebody wants to take a loan of credit, you get notified and so you'd be able to pick up any potential fraud very quickly. And we've got uprinz Mazubu saying, if you're married in community of property, will your partner's affordability affect your score? So what happens then, Michelle? You are married, I have my husband and I have an amazing, you know, credit score. My husband's credit score, not so much. I can afford, suppose we want to go buy a, you know, one million rent house, I can afford it all by myself and I have this great, you know, credit score. But unfortunately, my partner does not have a great credit score. Will his, you know, terrible credit score affect how we are going to be able to get a house? Yeah, so your credit profile and your partner's or your spouse's credit profile, when you're married in community of property, don't necessarily impact every line of credit that you've earned and make applications. So where are you going and making application for a home loan, for example? And the house is going to be purchased in both your names. And you're both going to have, your affordability is going to count towards both of you. Certainly for an in-community of property application. Where you're married out of community of property and the property that you're purchasing requires both partners, both spouses, from an affordability perspective. Again, both spouses, both people, application and credit profile is going to be important. For the most part, if you're going out and taking up, for example, a cell phone account or an insurance account, the fact that you're married in community of property is not necessarily going to impact your application where your affordability can be met on your salary, your individual salary alone. So it depends on the type of credit. But for a home loan, particularly the purchasing and selling of a property where you're in community of property requires both spouses consent in order to do that. Really the reality is that should you not be able to settle up your debt or your spouse is not able to settle up their debt, then the credit providers can come after both spouses. And that's when it becomes quite a difficult situation. If your spouse is taken on more credit that you've not been aware of, that you then become liable for as a result of that, how far away you've been to your marriage arrangements. We've got a comment here coming through from what's up with what you're saying. Always keep your credit spending just under 50% or even better at 30% or less. The lesser your spending is to income, the better your rating. Secondly, do not spend because you have a credit card or an account, but buy with the purpose which is reasonable inside. The more frequently you buy, even when not necessarily the more you appear to be credit-reliant, but honestly, and this is the part that I really want you to touch on with, but honestly, how the overall credit score is calculated remains a mystery. And this is a very huge take or very common rather take that people are still not quite getting how we get there. And I know that's probably a full episode by itself, but just at a brief level, perhaps just to also put Seppo's mind that is how our scores are roughly composed of? Because I know we always get this question and this comment where people still don't quite get a sense of where, how is this actually happening? Some people are like, but I'm paying on time. I pay more than the minimum. I'm not seeing it moving. How do I get to almost a perfect score, whatever that even looks like? Yeah, that's a secret source, Hazama. Thank you. So no, there's some fundamentals. Each bureau has their own score. So it's not standardized across the industry. Each bureau has its own score. And then on top of that, a credit provider doesn't simply look at the credit bureau data in order to make an assessment. That's third-party data. So a credit bureau for a credit provider would be third-party data. They're also going to look at their own internal data. So what information does say you're going and applying for a home loan? What information does the bank have on you already in terms of your transactional banking that can support the mortgage? And it could be that because you're banking with your own bank, you're more likely to get the funding at a better rate because the bank knows more about you. So what goes into it? Well, the first thing is it's about let's distinguish between a person with a thin file. In other words, a person who doesn't have a lot of information on them in traditional credit sensors. They're mostly maybe quite still young with not many lines of credit or they use cash transactions. Me personally, if you were to look at my credit profile, I'm one of those thin file type of people. And there's not a lot of information on my own credit profile. So that's a thin file person. Then you've got people with a lot of information on them and you've got to have enough information to support more credit, but not too much that we can see that you're overindicted already. So how do you distinguish the difference? Well, it's about understanding information about you that looks at the recency of the data. So how old is the data is what I'm saying. The older the data is, the less it impacts the score and the more recent the data is, the more it impacts your score. So if you've just had a judgment taken against you and that judgment is now only two months old, that's gonna have a bigger impact on your score than a judgment that is now four and a half years old. So it's not simply I have a judgment therefore it's negatively affected, it's when was that judgment taken? Then some of it also includes the value of that judgment. So how many you have and what is the value outstanding? So a smaller amount is gonna have a less of an impact on your credit score than a larger amount judgment. So we're looking at what the value is. Then we look at adverse listing. So it's not just do you have a judgment, it's also do you have an adverse listing? And an adverse listing again, recency and the value and how many you have. And the third thing is then those payment profile lines. And this is probably the most important and has the biggest weighting on your data. So what we're looking at here is what is the total commitment that you have to all your credit providers? We're gonna sum up every single credit agreement that you have. In other words, you have car finance, you have a home loan, you have four different credit cards, you have a store card, you have payday loan, you have, I'm trying to make this up, cell phone account, insurance account, how many of these accounts do you have? And what is the total value of credit that you've taken out in total? What is the total value that's outstanding today? So you may have a home loan, you've taken out a million round home loan, but only 800,000 is outstanding still today. And what is the value of the repayment on a monthly basis? Then we can look at the total value, the total value outstanding as of today's date and what the total value commitment that you have to all those credit providers is on a monthly basis. That's going to form part of the affordability assessment because simply because you have a good score, doesn't necessarily mean that you have the affordability in the mean store. So you might still have a good credit score, but the amount that you're looking to transact, there's no amount that you're looking to transact might push you over into an overindicated assessment. And that's going to impact your score as well. And then of course, when we're looking at those payment profile lines, it's about understanding, are you paying your accounts on time and in full every month or did you miss some accounts? And it might have just been, I've got too busy and it was a small amount and you thought you'd catch that next month. That miss payment has quite a big impact. And the more recent that miss payment is, the bigger of an impact that it's going to have on your credit profile. And then of course, it's the credit utilization. And this is where I spoke about the credit cards and the store cards. These are accounts that you have a value outstanding for but you may not access it. So you might not go and spend on your credit card this month or actually, it's December. There's extra expenses in December. And so you might overutilize your cards in December. So every month you could access or neutralize a different portion of these credit cards or store cards. And so what credit utilization is about is about how much is this access that you have to credit gets called at the 100,000 rent and how much have you utilized of that 100,000 rent? 60,000 rent. Well, 60 out of 100 is 60%. And the Bureau of Environment says that that's quite a big chunk. So you're gonna get penalized. If you only, as the previous quarter said, utilizing 30 to 50% of that facility that's in line with getting yourself a better credit score. So there's so many moving parts as I'm at. The best thing to do is honestly to have a look at your credit profile, to understand what's on there. You know, we're told to look at our bank statements every month, make sure that there's nothing that got deducted, that wasn't meant to get deducted. It's the same with our credit profiles. Have a look at your credit profile and identify information that is not being accurately updated and have it removed. And you can do monitoring. So it's not just about accessing your credit profile, but you can also monitor your profile. And so coming into that full conversation, you'll get a notification if anyone's done a credit check one year, where you haven't made an application. That's your first alert then to say, but hold on a second, I'm not going out looking for credit at the moment. And yet my credit profile's been pinned. How do I go about making sure that identity for is not about to start? And Michelle, as a rep of this evening, and you didn't mention this face of season, expenses that tend to come out, any tips for our viewers at home in terms of what they can do during this face of season to make sure that they don't get too ahead of themselves and do something that could potentially jeopardize their credit health. I think coming back to the budget summer, budgets are such an important thing. Making sure that we know what is the value that we're setting aside for this face of season, be it the holidays, be it presents for family and friends or whatever it is, what is the budget and I know it's difficult, but sticking within that budget because moving that budget and moving the goalposts only creates a big challenge for ourselves in the new year. And I think it would be so nice for all of us to enter the new year fresh rested and knowing that we don't have this additional stress of having to pay back a debt which we've taken out because we missed the boat on our budget. And I see that we've gotten a question coming in. And this is coming from all prints, we were saying judgments that happened during the pandemic. How much wage they have on one's profile is it considered the same as in previous years? That's a fantastic question because the bureaus do change. They do change and they change every, you know, regularly the bureaus are reviewing the weighting of the data and also the impact that COVID and the pandemic had on people's credit profiles. So there was relief that was given during the pandemic from a payment profile perspective and the impact that that would have on your score. So judgments that were taken during the pandemic itself, I don't think that there's any difference on the weighting of the data. It was more weighting of the data of the payment profile information. You know, judgment takes quite a long period of time to get to the point of taking judgment. Going about and creating a payment plan and getting it settled and then going and having it removed from your credit profile, that's the key element here. Another really great question coming through from Gattakwa Khaapa saying, does the nature of the credit have an impact on the credit score? For example, having multiple fixed cell phone contracts is much better than multiple clothing store accounts or are the credits that make wide-risk declines pretty much the same? So different credit providers are going to look at the data slightly differently as well. And it's simply because there's a generic credit bureau score, doesn't mean all bureau scores are treated the same with an credit provider environment. So different credit providers are going to look at the data slightly differently as well. I think the point is, the point is looking at your own credit profile and understanding the needs for that credit because if there's a need for that type of credit, fundamentally, that's something that a consumer's going to have on their credit profile. So it's not about saying, well, how do I manipulate my credit score based on the type of credit that I have? The credit that a consumer takes should be met with it, should be servicing a need that the consumer has, not just the R1-5, you know, cell phone accounts and six different store cards. It should be meeting a need. Michelle, we're going to leave it there this evening. Thank you so much for joining us on the show. And of course, joining us throughout the year, I hope you and your team are going to have a really great festive season. Thanks so much. Always a pleasure to participate. Thank you. And to Ulysses as all, happy holidays. Thank you very much. And that's Michelle Dickens, the CEO at the CPN Credit Bureau, wrapping up the Friday edition of the private property park costume myself, Osama Donga Kumalo. Unfortunately, we did not have a claim. So we've got to roll over to next week Monday. 1,000 rounds are going to be in the money bag. And that's how we wrap up. Well, it sort of felt like a long weekend. I know some of you are already on leave, but a few of us are already going to be ending next week. Well, we're going to be back on Monday, still doing those kind regards. But until then, hope you stay home and stay safe.