You may know that failing to settle your debt on time can result in a judgment, creating havoc with your credit score. But how long will it take for this to reflect?
We have a look at time frames and the “danger signs” that a judgment is imminent.
Tip: Debt consolidation will help you settle your debt easier. Get help today.
When will a judgment show up on your credit report?
According to Alain Le Roux, registered debt specialist at Cyber Finance, Cape Town, a default judgment will appear on a consumer or business credit profile as soon as the creditor’s attorney has informed all relevant credit bureaus.
“The five main registered credit bureaus in South Africa are TransUnion, Compuscan, Experian, Xpert Decision Systems (XDS), and CPB Online,” says Le Roux.
He explains that a default judgment against your name will remain on your credit report for a period of five years.
“Thereafter, the default judgment flag against your name will be removed by all credit bureaus, which is a rule that’s put in place by the National Credit Regulator,” says Le Roux.
“What many don’t know is that, even though the judgment has been removed from your credit report, this does not take away your obligation to settle the debt owed to the plaintiff,” he explains.
Le Roux points out that legally the judgment is still in effect and the plaintiff has up to 30 years to figure out how to get the money that’s owed to them.
READ MORE: Things that debt collectors are NOT allowed to do
Keep an eye on the danger signs, and get help
“It is vital for the consumer to understand how a default judgment can occur against them, and even more important to look out for the danger signs. These can include final demand letters, a Section 129 notice, or a Summons Notice,” says Le Roux.
READ MORE: Everything you need to know about a Section 129 notice
He adds that, to prevent a pending default judgment, it’s best to seek advice from a debt counsellor.
“In fact, all credit providers are compelled to inform consumers that they can contact a debt counsellor when facing a potential pending judgment or when they are having difficulty repaying a certain debt,” says Le Roux.
Sign up for debt consolidation today and make sure you get ahead of any action taken against you.