The national lockdown has put a strain on many South African households – many of whom may have already been struggling before the economy ground to a halt. So, it’s understandable that you might have slipped behind on debt repayments over this time and tarnished your credit score. Thankfully, there are ways to resolve blacklisting and your credit score can be restored.
If you’re worried that the blacklisting may affect your chances of obtaining a bond for your dream home, below are a few ways to help you resolve a blacklisting against your name:
Try to rectify the blacklisting against your name
The time it may take to rectify the situation depends largely on the blacklisting against your name. Removing a blacklisting can be a difficult and drawn-out process which differs depending on the circumstances of your case. Luckily, your real estate agent can refer you to an attorney to assist you in this regard.
Settle any debt affecting your credit score
The first and easiest situation to rectify is a default payment that will remain on your credit record for up to two years. If you’ve settled this debt, a request should be made by the creditor to the bureaus to amend the listing so that it reflects that the outstanding debt is paid in full. As a golden rule, when settling an outstanding debt with a creditor that has listed a default against you, it’s best to obtain in writing that they will amend or remove the listing. To be extra cautious, you should also seek legal advice from a specialist consumer law practitioner who can provide guidance.
Resolve outstanding court orders
Having a judgment (a court order compelling you to pay your debt) against you will be more challenging to resolve. A Magistrates Court deals with matters up to R100 000, while any debt that exceeds R100 000 will fall under the jurisdiction of the High Court. If the debt isn’t settled, it’ll remain on your credit profile for five years before it’s automatically removed. For this to be resolved before the five years, the New Credit Regulations states that the debt must first be paid. Once you’ve paid the debt, an attorney can then apply to have the judgment rescinded. However, the creditor will need to provide their consent before the judgment can be rescinded.
Take blacklisting preventive measures
Be proactive in your debts and take preventive measure against potential blacklisting. Remember to always read all clauses before signing a contract with any creditor and make your payments a few days before the deadline to avoid late payments. Also, keep a record of all payments made to creditors in case a payment isn’t received. If you relocate, notify all creditors of the change of address so you don’t miss any invoices. Lastly, if you’re unable to pay your creditors, make a written arrangement to restructure the payments where possible so that you do not face blacklisting.
Don’t lose hope if you have a blacklisting against your name. Reach out to a debt counsellor or a local real estate professional to start exploring what options are available to you.