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Monday, August 18, 2014 - 11:53
Unique challenges

When it comes to applying for and managing credit, women face some unique challenges. The best weapon against nasty financial surprises is to empower yourself with the correct information in order to take control of your finances. This is according to Debbie Sharwood at Wonga.com South Africa who, in light of August being Women’s Month, provides the below advice to women when it comes to credit processes.

Single mothers managing debt

The best advice for single mothers (or any women for that matter) is: Budget! Budget! Budget! However, it is even more important if you’re single and have dependants, says Sharwood. “It is essential that all women are in control of their finances, but if you are the sole breadwinner it is that much more important.”
Draw up a monthly budget detailing income and expenses, making sure you factor in debt repayments. Paying off debt should always be a priority – the sooner it is paid off, the less it will cost in the end, she says.

Changing your name when you get married

The credit bureau will hold details from the last time a consumer was credit active. In other words when they last applied for any credit, says Sharwood. “This means that if a woman used to have a number of accounts in her maiden name and changed her name when she got married, and since then her husband has been the one applying for credit, she might be declined credit on the basis that she hasn’t been credit active.”
While it is never a good idea to take credit just for the sake of it, it might be a good idea to have at least some lines of credit in your own name, for example your cell phone bill and credit card. “If you do have credit in your name, you should be sure to repay instalments on time. At least then the bureau will have an active and positive credit history on you.”

How to avoid any problems when applying for credit following a name change

If you used your maiden name the last time you applied for any credit and you now apply using your married name, upon receiving the enquiry from a credit provider the bureau will notice that your ID number is the same, but there is now a different name attached to that ID, she says. “The bureau will then need to send the ID number and name to Home Affairs for verification before they can associate your past credit history with your new name. The turnaround time on this can be fairly long, which can be very frustrating when credit is urgently needed.”
She says it makes far more sense to pro-actively get in touch with the Credit Bureau as soon as you have officially changed your name in order for your new name to be recorded on your current credit record, so that when you next need credit, you don’t have to wait for Home Affairs to verify it.

Married in community of property

When it comes to South African law, if no ante-nuptial contract is signed before marriage, you are automatically married in community of property. It is vital that women understand that both parties are liable for the debt when married in community of property, says Sharwood.
“Make sure you are aware of all the debt your husband holds, as, if something happens to him, you will be held liable for it, depending on your marriage contract. If possible, make sure you are aware of the financial situation in your marriage or family. Know exactly all the sources of income, as well as all the expenditure.

A final word on finances for women

Before getting married, think about what will happen if you get divorced or widowed, she says. “While it is a horrible thought, planning is essential. You don’t want to be left financially devastated if something unforeseen happens down the line.”
For those currently involved in a divorce, speak to your lawyer about ensuring your Divorce Settlement Agreement is drafted in such a way that you can enforce a garnishee order on your ex-spouse’s salary should he default on payments, such as maintenance, says Sharwood.

Copyright © Insurance Times and Investments® Vol:27.8 1st August, 2014
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