The purpose of this Act, along with its regulations, is to govern and regulate consumer credit agreements and to provide for some degree of measure on lending patterns so as to avoid what the act termed reckless lending by credit providers among other things.

It further provides guidelines on how and for how long the credit bureaus must keep records of the consumers on their databases

“Reckless lending!
The total outstanding South African consumer credit balance or debtors’ book stood at R1,3 Trillion at the end of December 2011 which emphasis the vital role played by credit lenders, particularly in households and small businesses.

However this should not mean that the credit lenders must borrow to consumers who cannot afford to repay or honor their credit agreements and if it is found that the credit provider borrowed the consumer in circumstances where it should not have, such debt can be wiped out without the consumer paying anything.( Section 81(3) of the Act) Our courts are empowered to invoke reckless lending provisions in the Act to set aside any obligations by the consumer flowing from reckless lending practices by the credit provider.

The act also provides guide on how long the credit bureau may keep consumer information on their systems, some examples are as follows,

For adverse classifications of consumer behaviour such as default, delinquent, slow payer, absconded, or not contactable the period is one(1) year.

For adverse adverse classifications of enforcement actions such as legal action pending, handed over, bad debt written off, the period is two (2) years.

For those who are under debt counselling, as soon as you obtain clearance certificate, your adverse record on credit bureau will also be removed at that point.