How Long After Debt Review can you Apply for Credit?
If you're wondering how long debt review lasts, or perhaps you just have quite a few questions regarding the debt review process, this blog post will clear things up for you.
What is debt review?
Before we answer how long after the debt review process you can apply for credit, let's first get clear on what the process is.
Debt review or debt counselling refers to the same debt relief process that was introduced by the National Credit Act (NCA) to help over-indebted consumers.
How long does debt review stay on your name?
The debt review flag will remain on your credit record until you have successfully completed the debt review (debt counselling) process. You will also have to get issued with a debt review clearance certificate to indicate to the credit bureaus that you are no longer in the process.
There is not a set period for everyone as the time it takes is dependent on:
- how much debt you have
- how much money you can afford to pay each month
- your repayment terms
The debt review process usually lasts between 3-5 years.
What is a debt review clearance certificate?
A clearance certificate for debt review (Form 19) is a formally recognised document introduced by the National Credit Regulator (NCR) that confirms that you have successfully completed the debt review process. If you've ever wondered how you get clearance from credit bureaus, the key is with this document.
Obtaining a clearance certificate, is also the only way you can legally exit the debt review process. And, the way to do this is to ensure all your debts and payment arrangements, according to your repayment plan, have been paid in full.
Read the article to find our more about debt review removal.
How Long After Receiving My Clearance Certificate can I Apply for Credit Again?
Technically you should be able to apply for credit ONE week after receiving your debt clearance certificate.
How long does it take to clear your name from a credit bureau?
Because credit bureaus may take some time before updating your credit profile, we recommend waiting for about 3-4 months after receiving your debt review clearance certificate. During this time, you can monitor your credit report to see if the debt review flag is still on your profile.
Can banks discriminate after debt review?
A reason some people may not want to register for the debt counselling process is because they fear that it would hurt their chances of applying for credit in the future. This is not the case. Debt review is actually an opportunity for improving your credit score.
Before approving a loan application, banks will retrieve your credit report to check your affordability. Once you’ve completed debt review, and credit bureaus have updated your report, the only thing showing should be your payment history.
If you want to know more about debt review (debt counselling) including:
- debt counselling fees
- who pays the debt counsellor
- how the process works
- if it would be a good idea for you, read this blog post.
How long after debt review can you buy a car?
While you should technically be able to apply for credit one week after receiving your National Credit Regulator (NCR) clearance certificate, as mentioned earlier, you have to take the following into account:
- Credit bureaus may take some time to update your profile. Banks retrieve credit reports from credit bureaus so it is essential that your report has been updated before applying for a loan.
Read the article to find out more about life after debt review.