The term ‘blacklisted’ has typically meant that you as a consumer are in arrears with an account or have a judgement against your name for an account.
This prevented consumers from acquiring further credit, sometimes for a period of up to five years. This term, however, dates to when credit bureaus only listed negative consumer information.
This has since changed.
Credit bureaus now list both positive and negative information, which lenders have come to find offers a more holistic and accurate depiction of the type of payer they are dealing with.
The three main types of listings are:
- Being in arrears. This signals you being behind on payments owed.
- Having a default against your name. This is the case when your payment is overdue for an extended period, typically three months or more.
- When there is a judgement against your name. In this instance, the lender has taken legal action against you in the High Court.
Simply put, being listed these days means you have an account that has tainted your credit profile and may prevent you from receiving credit.
What’s vital to note is not only the type of listing but also the frequency of the listing. Different listings also carry different weights in various financial institutions’ credit processes.
But what they have in common is that once a judgement or default has been listed against your name, it means that lenders at large will be hesitant to offer you any form of credit. This extends to rental and service agreements, loans, and even employment.
What’s more is that while in the past you may have been ‘blacklisted’ for an extended period even after you have settled the debt, in recent times it has become far simpler to rehabilitate your credit profile.
The best way to start this process is by paying back the money owed as agreed upon. If you are unable to meet the original agreement, contact your creditors and renegotiate an amount that is realistic for you.
Once you have settled the debt, your creditors should provide you with a paid-up letter. This is then sent on to the credit bureaus and your information is subsequently updated to remove the judgment or default listed against your name.
Even though the term and implications of ‘blacklisting’ are no longer in use, ignoring your financial health can have major implications on your life going forward.
It is also always advisable to stay informed about your financial health through regularly accessing your credit report.