What to do after you've been blacklisted

The national lockdown has put a strain on many South African households - many of whom may have already been struggling before the economy grounded to a halt. It is understandable that one might have slipped behind on debt repayments over this time and tarnished his or her credit score. Thankfully, blacklisting can be resolved and one's credit score can be restored.

"A large number of potential buyers are referred by their estate agents to attorneys if they have a blacklisting against their name that is preventing them from obtaining a bond. It is possible for a buyer to rectify a blacklisting against their name, however, how long the process takes depends on the blacklisting against their name. Removing a blacklisting can be an arduous, drawn-out process which differs from one case to the next depending on the circumstances," explains Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.

The first and easiest situation to rectify is a default payment that will remain on someone's credit record for up to two years. "If the debt is settled, a request can be made by the creditor to the bureaus to amend the listing to reflect 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, obtain in writing that they will amend or remove the listing. It is also advisable to seek legal advice from a specialist consumer law practitioner who can provide guidance and a clearance service," Goslett recommends.

A judgment, on the other hand, is more complex than a default listing as it is a court order compelling the defaulting party to pay a debt. A Magistrates Court will deal 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 is not settled, it will remain on the credit profile for five years before it is automatically removed. "For the judgment to be removed from a credit profile before the five-year period, the New Credit Regulations provides that the debt must first be paid. Once settled, an attorney can then apply to have the judgment rescinded. The creditor will need to provide their consent before the judgment can be rescinded," says Goslett.

Keeping a clean credit record is less costly and time-consuming than dealing with adverse credit information. To help future homeowners keep their credit score clean, Goslett suggests that one always reads all clauses before signing a contract with a creditor. "Make payments to the creditor a few days before the payment deadline to make sure you never make any 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. And, lastly, if you are unable to pay your creditors, make a written arrangement to restructure the payments where possible so that you do not face blacklisting," Goslett concludes.