Money Advice

By admin
31 December 2013

What is blacklisting and how can one land up with such a record?

We have all heard of the so-called ‘blacklist’, where people are listed when they have not paid or have defaulted on their credit payments. The blacklist does not exist.

There are two credit bureaus in South Africa namely ITC and Experian that have files and lists of millions of consumers – most of whom have good payment histories. If you have a good record or a bad record or you have failed to pay for something or you have had something repossessed, this will show on your profile.

Information on how you pay your accounts is held by the credit bureaus – whether you are a good payer or a bad risk. The credit bureaus have 18 million people on their databases, and 85% of people have a positive credit profile or are good payers.

What happens if you are a bad payer?

Every month, credit grantors – such as the big retail shops, banks and companies – send your payment information to the credit bureaus. If you continuously miss payments or stop paying, then the credit grantor will inform the bureau and this will be recorded on your credit record. This is what is known as ‘blacklisting’. A blacklist does not actually exist – it is really just a bad (‘black’ or negative) record.

Credit grantors are responsible for communicating to the customer when they are about to begin any type of action against them. A credit grantor needs to give a consumer 28 days notice, before a negative listing is done on the credit bureaus. This will enable the consumer to dispute the information in the event that the information is incorrect.