Monday, June 24, 2024

Credit Report:Zambians Can Use Their Credit Report to Master Financial Literacy

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Credit Report

Credit report checks are a fundamental aspect of safeguarding one’s financial well-being, particularly during Financial Literacy Week. The theme, ‘Protect Your Money: Protect Your Future,’ resonates deeply, emphasizing the necessity of more than just basic banking practices. It underscores the importance of vigilance against fraud. One effective way to combat fraud is by regularly reviewing your credit report. Any fraudulent activity, such as unauthorized loans taken out in your name, would be reflected in your credit report. Should you encounter any discrepancies or suspicious entries, promptly contacting the relevant credit bureau to initiate further investigation is crucial.

Tips for Empowering a Brighter Financial Future

As we commemorate Financial Literacy Week, we are reminded of the critical importance of financial education in today’s world. The theme of the week is ‘Protect Your Money: Protect Your Future,’ which means so much more than keeping your money in a bank account – it also encourages you to guard against fraud. You can do this by checking your credit report to ensure its accuracy, as fraudulent loans taken out in your name would appear on it. If you find anything suspicious, you can contact the credit bureau that issued the report to investigate further.

A study by TransUnion Zambia showed that while most (94%) consumers acknowledged the importance of credit monitoring, 30% of consumers did not monitor their credit reports. This highlights the need for more education about financial products and tools to support regular credit monitoring, which is an essential part improving financial literacy.

“In Zambia, there’s a growing recognition of the value of financial literacy, but we still have a long way to go. Financial Literacy Week is an opportunity for us to encourage Zambians to learn more about managing their finances and credit profiles, so that we can all work together to build a stronger economy into the future,” says Mildred Stephenson, Chief Executive Officer at TransUnion Zambia.

The survey data showed a mixed reality for Zambians:

Despite 38% experiencing income growth and 82% expressing optimism about future increases, many Zambians are concerned about escalating living costs and loan expenses.
To deal with financial strain, 43% of Zambians used instalment payments, while 29% considered borrowing from family and friends. Additionally, one third contemplated tapping into savings, and 39% planned to reduce non-essential spending.
There has been a decline in confidence within the credit market: While 96% of Zambians value credit access, only 30% feel it is adequate. Furthermore, 62% are hesitant to seek new credit due to high interest rates.
Cybercrime poses a significant concern, with 76% of Zambians reporting experiences of fraud attempts. Consequently, 95% are taking extra precautions to safeguard their personal data.

Understanding your financial standing empowers you to make informed decisions and take proactive steps towards strengthening your financial well-being.

Mildred shares four tips that can help consumers improve their credit scores:

Know how much you owe: Make sure that you understand your credit limits and the outstanding balances on each account. This insight helps you plan better to pay off your debts on time.
Pay your bills regularly: Consistently paying your bills on time is essential for building and maintaining a positive credit score. Timely payments show creditors that you’re financially responsible and reliable.
Stick to a budget: Establishing and sticking to a budget is the best way to manage your money effectively. Budgeting helps you to allocate your money appropriately, manage expenses, and ensure your bills are paid on time.
Regularly check your credit report: Stay vigilant by regularly checking your credit report. When you get your free TransUnion credit report, check it carefully for inaccuracies, such as accounts that you don’t recognise or incorrect information about late payments. Disputing this kind of inaccurate information from your credit report can improve your credit health and your credit score. Importantly, it can also help detect fraud if someone else has applied for credit in your name. For more information and details on how to check yours, visit Transunion Africa or email [email protected].

Personal finance educator Jane Mazimba adds: “Part of protecting your future should be investing in knowledge around debt. This includes how much we owe, our repayment plans, and paying debt off so that we can safeguard our credit scores for a secure future. Learning how to effectively fund, use, and pay back loans is one of the best ways we can secure our future.”

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