Cape Town - At some stage in just about everyone’s life, they are going to apply for credit: you may be buying a house or a car, and you are applying for finance. Here’s why you don’t want to get a nasty surprise.
Many people only find out that they have been blacklisted once they apply for credit. To be blacklisted means there is negative information about your debt repayment history on your credit record. This could deter potential creditors from lending you money, or letting you open an account.
You may have moved, and never received the mail, or you could have overlooked a small account, or simply forgotten about it. People tend to think of troublesome debts as the big ones – you are just as likely to be blacklisted for a small outstanding amount, as for a big one. Imagine having your life turned upside down for an outstanding bill of R160. It happens.
Every person has the right to a full, free credit report once a year. This can be a very useful thing to have.
Only once you are in possession of your updated credit profile are you able to determine if the information which the credit bureaus have listed is in fact correct. In the case of something such as identity theft, people get a nasty surprise when they are blacklisted for an account they never opened.
It is also possible that a mistake has been made and that an account, for which you have been blacklisted, is actually paid up. But then you might really be in arrears on accounts – in which case the blacklisting probably won’t come as a surprise to you.
Because of these factors you could be unaware of negative information on your credit profile which could be hampering your chances of getting credit when you really might need it for something such as a home, or education.
The problem with being blacklisted is that it could taint your credit profile for between two and five years and credit providers will see you as a high risk, and are likely to turn down your application.
You could be blacklisted for the following reasons:
- For not making scheduled payments on accounts that are in arrears (if, for example, you have signed an agreement to pay an extra R400 per month on your bond to play catch up, and you fail to do so). In such a case legal action may not yet have been taken.
- The company you owe money to has handed you over to a legal firm, because you have not paid your accounts on time. Don’t forget, that even at this late stage, you can still negotiate payments. Failing to pay an account could lead to a legal judgment against you. (An outstanding judgment means the person who lent you the money can hold you accountable for thirty years – with interest.)
- If you have paid your account in full, but not according to the original time frame, your creditors can leave this information on your credit profile for two years.
A word of warning: take great care when applying for credit at institutions or businesses who say they don’t mind if you are blacklisted. Factored into your repayment schedule will be the reality that some of their clients won’t pay them back. You could find yourself paying a fortune for other people’s bad debts.
Here are the telephone numbers of some large credit bureaus.
Trans Union – 0861 482 482
Compuscan – 0861 51 41 31
Experian – 0861 105 665
Consumer Profile Bureau - 010 590 9505
Credit Watch - 011 483 0086