Credit Score Checks for Business Compliance

Credit Checks for Compliance

Credit score verification is an important compliance tool for South African businesses. Understanding when and how to use credit checks supports regulatory adherence.

Why Businesses Check Credit

Credit checks support:

Affordability assessment: Required under NCA
Risk management: Understanding customer risk
Compliance: Meeting regulatory requirements
Due diligence: Comprehensive customer assessment

Compliance Requirements

Credit checks may be required under:

National Credit Act
FICA requirements
Company credit policies
Industry regulations

When to Conduct Credit Checks

Perform credit checks during:

Credit applications
Finance agreements
Rental applications
Employment (specific roles)
Supplier vetting

Remember to:

Obtain proper consent before checking
Explain purpose of the check
Comply with POPIA requirements
Document consent obtained

Using Credit Information

Credit data should:

Inform decisions appropriately
Be used for stated purposes only
Be protected securely
Not discriminate unfairly

Documentation

Maintain records of:

Consent obtained
Purpose of check
Results received
Decisions made
Staff conducting checks

Conclusion

Credit checks are valuable compliance tools when used properly. Understanding requirements ensures both regulatory compliance and fair treatment of consumers.