By Neesa Moodley-Isaacs, from Personal Finance
So your blacklisting at the credit bureau has finally been cleared after five years and you can obtain credit with a clean slate. But have you checked to see whether the debt that got you into trouble in the first place has been fully repaid?
When you default on a credit repayment and are blacklisted by the credit bureaus, the blacklisting remains in place for five years.
However, clearing your name only means that you can once again apply for credit; it does not mean that your debt has been cleared. You are still liable to pay your creditor whatever money is owing on the principal debt, and any interest that may have accrued on that debt.
Manie van Schalkwyk, the Credit Information Ombud, says creditors must obtain a judgment or court order against you before you can be blacklisted. "When the magistrate signs the judgment order, the credit grantor is awarded certain rights in relation to the debt," he says.
The judgment order gives your creditor up to 30 years to recoup the money you owe, as well as the right to use all available legal means to recoup the money. This can include putting a garnishee order on your salary and attaching your property or belongings.
You should contact your creditor and negotiate a repayment plan even in the case of blacklisted accounts, because these accounts accumulate interest on arrears.
Updating your profile
Once you have settled your debt, the credit bureau should reflect this on your credit profile. For the credit bureau to do this, you must provide proof of payment or a letter from your creditor stating that your debt has been settled.
The National Credit Act (NCA) entitles you to one free credit report from each credit bureau every year in the month of your birthday. Additional credit reports in the same year will cost you R20 each. You should perform a check every year to ensure that you are not listed for a debt you do not owe and that the bureaus have recorded your personal details correctly.
The NCA places the onus on the credit bureaus to ensure that the information they store about you is correct and up to date. If you have to spend any money to correct information held by a credit bureau, the NCA empowers you to claim that money back from the credit bureau.