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How To Clear Your Name After Being Blacklisted
The term "blacklisted" sounds terrible, but it becomes a real pain only when you want to start financing a large purchase and try to get a loan from a bank or financial institution.
Having your name blacklisted means you are not eligible to receive credit and lenders see you as a risk they are not willing to take.
Why do you get blacklisted in South Africa?
People who incur unnecessary debt find themselves in a position where they are no longer able to service those debts. Failure to pay debts has long-term consequences, and you will be labelled a defaulter.
Your name will then be registered with the local credit bureaus, and next time you apply for liability, your name will be flagged. This flagging means you've been blacklisted and won't qualify for a loan.
Can I get off the South African creditor's blacklist?
The good news is that it is possible to clear your name with the credit bureaus. It might not be an easy road ahead.
The path to getting off the blacklist is tedious but worth it. It will allow you to build a sound financial future if you can get yourself on the right side of the credit bureaus.
1. Know what is going on with your credit profile
As a South African citizen, you receive one free credit report per year. Pull a credit report from one of the reputable credit bureaux, so you can see which items on your profile are causing the issue.
Protip! Check out our latest post if you want to know more about these reports or would like to check your South African credit score
2. Settle judgements on your profile
If there are any judgements on your credit profile, settle those first. According to the Credit Act, these have to be removed immediately once the judgements can be settled.
3. Get your arrears up to date
The number one issue that leads to blacklisting is when accounts in arrears. Pay up your accounts as soon as possible. The fact that it was in arrears in the first place will remain visible on your record for 24 months, but if you can show good payment behaviour for 3-6 months your odds of securing credit are much improved.
4. Bring defaulted accounts up to date
Bring defaulted accounts up to date or settle it outright. Once this is done, you can negotiate with the credit provider to remove the default listing, which has a significant impact on how your credit score is calculated.
Protip! Don't settle your debts all at once; it will not have a positive effect on your credit score you think it will. The key is to show good payment behaviour over a prolonged period.
5. Go into debt counselling (Optional)
If you cannot manage your debt along with your current financial obligations, then debt counselling or consolidation is an option.
Protip! Make sure you use a reliable and established debt review company registered with the proper certifications. Check out the track record of a company before you approach them.
There have been several reports of local fly-by-night debt counselling businesses that will take a consumers money, and not service your debts as agreed.
After you've consolidated your debts, keep track of them to make sure they're being paid regularly. It will take you longer, but your obligations will eventually be paid.
Once your debt has been paid your creditors write a letter to the credit bureaus absolving you of all debt obligation.
6. Get legal help (Optional)
Few South Africans are aware of their consumer rights and how the law protects them. Even fewer have access to attorneys to represent them, which is why creditors often prey on suspecting consumers who aren't aware of their legal rights.
If you have several creditors all stating, you owe them money, and they have blacklisted you. It's important to consult legal counsel to find out if that debt is still valid or if it can be written off by the company.
In some cases, this could reduce your overall debt obligation and make it easier to pay off your outstanding balances.
Tell us your blacklisting story
Have you been blacklisted by poor financial decisions or by no fault of your own? How did you find out? What did you do about it? Share your experience with us in the comments section below.
Are you looking to promote your business?
South African finance business owners can create your free business listing on nichemarket. The more information you provide about your business, the easier it will be for your customers to find you online. Registering with nichemarket is easy; all you will need to do is head over to our sign up form and follow the instructions.
If you require a more detailed guide on how to create your profile or your listing, then we highly recommend you check out the following articles.
If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on money tips.
- How South Africans Can Save Money Each Month
- How To Save Money To Buy Your Dream Car
- Is It a Good Idea to Have More Than One Source of Income?
- Why You Should Consider Debt Counselling As An Alternative Option
- Why You Should Not be Afraid Of Getting A Credit Card