Blacklisted – In need of help?
BLACKLISTED is not a word that brings good things to mind!
Let’s be clear, there is no physical “blacklist’ on which your name appears.
Blacklisted is just a very broad term used to describe someone who has fallen behind with paying their creditors and who now has anything from an account in arrears, to a judgement against them – reflecting on their credit report
Being blacklisted is not the end of the world, but having very negative credit report does come with some challenges.
Once you have a default or judgement on your credit profile, you will struggle to get credit from most registered financial institutions – and even rental agents/ landlords and prospective employers use your credit report to assess your suitability for their particular needs.
There are certain things which negatively impact your credit score. These are things you need to get sorted as soon as possible.
According to leading credit bureau, Transunion – the following impacts your credit score:
- Too much debt: Having too much available credit can sometimes harm your credit score. Credit or service providers may feel that you have the ability to spend more than you could potentially pay back. You might want to consider closing a few accounts or asking to have your credit limits reduced.
- Your account balances are too high: High levels of debt can signal to potential credit or service providers that you are spending more than you can afford. It is a good idea to use your credit cards regularly but remember to keep your balances below 35 percent of your available credit limit. If you have balances above 35-50 percent, you could see your credit score start to drop.
- Late Payments: Late payments will drop your score. In other words a 90 day late payment is more damaging than 30 days late. Always pay at least the minimum amount on your credit account each month.
- Too many new accounts: Looking for new credit can equate with higher risk if the enquiries are done across many different industries within a short period of time. Opening several credit accounts in a short period of time affects your TransUnion score. The impact from applying for credit will vary from person to person based on their unique credit histories.
- Public Record information: Bankruptcies and judgments on your credit report are items of public record that indicate that you did not honour a particular debt obligation. In some cases, such as judgments, it also indicates that the credit or service provider took legal action against you in an attempt to collect the debt. An item in this category will significantly lower your score. Payment of these types of items will not immediately undo the damage to your credit score.
Use debt review to clear your debt and raise your credit score
The best way to raise your credit score is to pay up all your existing debt. This is what debt review offers you. A registered debt counsellor will arrange for you to pay lower monthly installments on all your debt, and become debt free within 2-5 years.
Whilst you are doing this, you will be ‘flagged” all credit bureaus – and you will not be able to incur new debt, and that is a good thing!
Once you are done paying up all your debt, your debt counsellor will issue you with a clearance certificate and notify the credit bureaus that all your debts have been paid up. At this stage, you will be debt-free and ready to to re-enter the credit market, should you wish to do so.
Choosing the right debt counsellor on your journey to no longer being “ blacklisted” is vital in becoming debt-free. You are however at the right place. NDA is one of SA’s leading debt counselling companies and have highly competent staff members who can assist you with your debt review process