MONEY CLINIC | I'm unable to obtain credit. How can I clear my name?

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In the event that not all the debt is paid-up, the debt counsellor must request updated balances and establish the reason for any outstanding balances.
In the event that not all the debt is paid-up, the debt counsellor must request updated balances and establish the reason for any outstanding balances.
tolgart/Getty

A Fin24 reader who was under debt review wants to know why his applications for credit is being denied, after being told that he had paid up his outstanding debt. He writes: 

I was under debt review and paid up until March 2012. The money was deducted from my salary.

When the company stopped deducting the money, I was told the debt that was [cleared when] the debt counsellor was paid up. Now, everywhere I apply for credit, it is declined. How do I clear my name? 

Neil Roets, founder and CEO of Debt Rescue, responds:

There are a few factors to look at when approaching this situation. It needs to firstly be established why the credit providers are declining the credit application.

If it is because of the debt review flag, the first thing to do would be to contact the debt counsellor and request them to obtain the paid-up letters for all the accounts that were listed under debt review. Once these are all obtained, the debt counsellor must issue a Form 19 (also known as a Clearance Certificate) to all the credit providers and credit bureaus, and update the debt review status to advise that the Clearance Certificate was issued. 

In the event that not all the debt is paid up, the debt counsellor must request updated balances and establish the reason for any outstanding balances. It is important to then also establish whether any of the debt has possibly prescribed at this point. Any outstanding balance that is not subject to prescription, would need to be settled in order to issue the Form 19. 

If the rejection is not due to the debt review flag, but another reason, that would need to be investigated to rectify the requirements.

*Questions may be edited for brevity and clarity.

  • Have a money problem that needs solving? Fin24 can help! Send your question to editor@fin24.com.

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