What does being blacklisted in South Africa mean?
Previously, when credit bureaus only stored negative information, people in South Africa who made use of credit services could be blacklisted. However, for some time now, there has been no such thing as being blacklisted in South Africa. This is because credit bureaus store both negative and positive information regarding your credit profile/ credit history.
The term "blacklisting" can be misleading. It actually refers to any negative information that could be present on your credit profile. This negative information can mean that you are seen as a high-risk borrower to creditors.
How do I check if I'm blacklisted?
While there is no such thing as being blacklisted in South Africa, your credit report can contain negative information. This negative information can affect whether you get approved for a loan and your overall credit score. The negative information that can be stored on your credit profile can be:
- Judgements
- Inquiries into your credit report (when a credit lender requests to review your credit report before granting you credit)
- Defaults or late payments
- Collections (if your account has been handed over to a debt collector)
You can find out whether you’re ‘blacklisted’ in South Africa for FREE by checking your credit report from Meerkat.
What happens when you’re blacklisted?
Credit lenders see you as a higher risk and may either:
- Not approve your loan or credit application.
- Grant your loan application with a higher interest rate.
How long does negative information stay on your credit report in South Africa?
The time negative information remains on your credit report depends on the type of negative information it is. Let’s consider how long ‘blacklisting’ lasts in SA, depending on the type of negative information:
What is a judgement in South Africa?
A judgement is granted by a court against a consumer who has not paid their debts according to their credit agreement.
Read: What to do if you have a judgement against you
How long can a judgement stay on your credit report?
A judgement can stay on your credit report for 5 years or:
- Until you’ve paid the outstanding balance in full.
or
- Your judgement is rescinded by a court.
Read: What to do if you have a judgement against you
What does defaulting on your account mean?
Defaulting on your account means you have not followed the terms of your credit agreement. This agreement was signed when you took out a loan for a service or product. A default can include either missed or a late payment.
When will a creditor let a credit bureau know you’ve missed a payment?
A creditor will usually wait at least 30 days after a consumer has missed a payment before notifying a credit bureau.
How often is your credit report updated?
Your credit report is usually updated every month when creditors send credit bureaus updates regarding your credit profile.
How long does an inquiry remain on your credit report?
An inquiry by a credit lender can remain on your report for 1 year.
How long does a default or missed payment remain on your credit report?
A default can remain on your credit report for 5 years.
How can I improve my credit score after being blacklisted?
The best way to improve your credit score after being blacklisted is to pay your debt. You can dispute incorrect information on your credit profile, but you can’t dispute accurate information.
3 Tips to improve your credit score
- Pay your debts in full and on time each month.
- Do NOT take out any more credit.
- If you are able to, pay more than the minimum balance each month.
What can you do to protect yourself from being ‘blacklisted’?
If you cannot make your monthly payments or fear you may miss them, you should strongly consider debt review. This is a great option to help you manage your debt.
Debt review, also known as debt counselling, is a legal debt relief measure in South Africa. Its purpose is to assist South Africans who have too much debt and can't afford to make their monthly debt repayments.
It works by assessing if you are over-indebted. It also takes into account your income and expenses. This creates a reduced and affordable repayment plan to pay off your debt.
Read: Debt counselling | Everything you need to know
How to clear my name from being blacklisted?
Are you ‘blacklisted’ and need a loan urgently?
First consider why you need a loan. Do you need financial assistance to pay for essentials such as groceries and electricity? Are you struggling to pay off your debt?
If this is you, instead of a loan, you should seriously consider going under debt review.
Debt review is a way to reduce your monthly debt repayments by up to 50%. It can also reduce the interest rate on your loans, resulting in a lower total debt amount. This can give you more financial room at the end of the month for your daily expenses.
The truth is, you can’t get out of debt by creating more debt. A loan is just a temporary debt relief measure. Debt review (debt counselling) is a more permanent solution.
Meerkat's Debt Counsellors are registered with The National Credit Regulator (NCR).
Who is Meerkat?
Meerkat is a financial wellness company that wants to help South African consumers do MORE with their money. We can help with debt repayment negotiations, provide affordable insurance and help you kickstart an emergency fund
Fill in the contact form on our website to receive a free callback from the Meerkat team today.