HOW TO CLEAR YOUR NAME AFTER BEING BLACKLISTED

Getting yourself into debt is easier than digging your way out. In 2022, the word “blacklisted” is still incorrectly bandied about, and it should not. Until 2011, the term described someone who did not repay what they borrowed, either from a bank or a business that sold a product or service, to refund over time.

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Many households feel the ever-painful pinch of ever-rising prices, and many turn to high-interest loans and overdraft facilities to stay afloat. Historically, “blacklisting” happened when repaying the money borrowed was not honoured, and debt collectors came calling.

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CHANGING THE RULES
However, many people do not know that “blacklisting” is no longer a legal term, as it only ever indicates negative information on a person’s credit report. Thankfully, that has all changed due to the National Credit Regulator (NCR) insisting that banks and other lenders also need to collect positive details of clients to evaluate whether they meet repayment requirements.

Currently, 34.5% of South Africans are unemployed, making bad debt or defaulting on payments sadly all too common. To avoid even more pain, being on top of what’s due and by when is critical.

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HANDLING DEBT
Many people fall on hard times, but the way out of a debt spiral is not to run and hide. Instead, it is time you protect your credit score.

A poor score comes from making late payments, longer than 30 days overdue, or simply not paying an instalment. However, every time you make a payment, that is recorded too and is reflected positively.



TAKE CONTROL
A bit like going to the doctor for an annual check-up, do the same with your finances. The best part? It does not need to cost you a cent.

Once a year, we are all granted a free credit check thanks to the NCR. The most popular and easy-to-use websites to run your check are TransUnion and ClearScore. And for those who need a little more help, there’s SA Credit Clear, which offers debt counselling and credit repair.

NEXT STEPS
If you find yourself between a rock and a hard place, get on the phone and negotiate with creditors to reduce monthly repayments. Creditors would prefer to get something in, no matter how small, rather than getting nothing at all. That way, everyone wins, and you get to stay clean.

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THE BOTTOM LINE
Where possible, steer clear of taking on debt or living beyond your means. If you do, be aware that it comes at a price, sometimes three times the value of the very thing you are after. Be it a new phone, a lounge suite, or that 60-inch HD TV you do not really need, the offer will be wonderfully appealing when it reveals itself, but don’t take the bait.

Before committing to anything you cannot pay for in cash, consider asking yourself three fundamental questions:

1. Can I afford it?
2. Do I need it?
3. Can I live without it?

If the first two out of your three answers read as a “no”, simply do not do it. This is because you’ll only be setting yourself up for an extended period of interest-loaded payment pain you could have and should have, avoided.

Yes, it is great to have fun with new distractions in your life, keeping up with your neighbours and all that, but before you commit, consider the actual cost. Not only to you but to your family and the precious credit score that affords you a tomorrow.

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