Lockdown was hard, but even harder on some of our pockets. If you are concerned you might be blacklisted or that your credit record has been affected by the lockdown, this is the article that you must read today.
What does “blacklisting” mean?
“Blacklisting” is a term widely used among South Africans when you do not qualify for loans or cannot buy goods on credit. The term “Blacklisting” is very misleading as it refers to a time in history where credit bureaus only kept negative information relating to a consumer. The wording itself was used informally to indicate that a person’s credit report contained negative information.
In recent years credit bureaus keep a more comprehensive record of both positive and negative transactional history which information is then used by credit suppliers to assist them in determining your credit worthiness.
What is your credit record?
Your credit report is a record of your payment behaviour over a period of time, normally two years. In short, it is a summary of your missed payments, late payments or other information relating to your credit history.
What is your credit score?
Your credit score is a rating which is calculated by using the positive and negative information on your credit record. The higher the score the more likely a lender might be willing to give you credit, depending on their credit criteria.
Can I be blacklisted without my knowledge?
The NCA determines that a consumer must be informed in writing before adverse information about consumer is passed onto the credit bureau. This however does not mean that your credit record is correct – identity fraud, incorrect data and old information are some of the factors that can influence your credit rating negatively. It is therefore imperative that South African consumers check their credit rating on a regular basis.
Can I access and challenge the information held by the Credit Bureaus?
In terms of the National Credit Act (NCA) South Africans have the legal right to access and challenge information held by a credit bureau.
How long does “Blacklisting” last?
Your negative listing will remain on your record for a minimum of two years and sometimes longer.
|Court Judgement||A court judgment is where a court issued a judgement against you and instructed you to pay the outstanding amount. A court judgement will continue to reflect on your credit report for a further five years.|
|Sequestration||A sequestration order remains on your credit report for five years, or until a rehabilitation order is granted. A rehabilitation order will continue to reflect on your credit report for a further five years.|
|Administration Order||If you have applied to be placed under administration, this will remain on your credit report for five years or until the administration order is rescinded by a court.|
|Debt Restructuring||Information relating to applications for debt restructuring remains on your credit report until a clearance certificate is issued.|
|Adverse classifications: enforcement action||If you don’t pay your account and the credit provider takes action against you (e.g. sending you a letter of final demand), the information will remain on your credit report for one year.|
|Adverse classifications: consumer behaviour||e.g. continuous late payments of accounts can result in you can being labelled as a bad payer, late payer. This classification remains on your credit report for one year.|
What other negative information can be contained in my credit report?
|(1) Enquiries:||Every time you apply for credit (e.g. a cell phone account, a clothing store account etc), the credit prover will make an enquiry into your credit record. All the enquiries are recorded and will reflect on your credit report for one year. A high number of enquiries could indicate that you may be in financial difficulties.|
|(2) Complaints:||If you lodge a complaint about your credit report and your complaint is rejected, the information will be reflected on your credit report for six months.|
|(3) Debt restructuring:||Information relating to applications for debt restructuring remains on your credit report until a clearance certificate is issued.|
|(4) Trace:||A trace alert is placed on your credit report by a credit provider who has been unable to make contact with you and has asked to be notified when any updated contact information is loaded on to your credit report.|
|(5) Consumer remarks:||You can ask that TransUnion include an explanation of facts or conditions that affect you on your credit report. For example, if your identity document has been stolen, you may want this information included in your credit report to try and prevent your identity being used fraudulently.|
How can my credit profile be restored after my debt was settled?
There are various options available to clear your record however the easiest way is to settle the debt for which you were listed and if you have a judgement against you to have the judgement removed.
Our office can be of assistance to do the “cleaning” of your credit profile. Contact us on (021) 8242020 or firstname.lastname@example.org.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)