How long does debt reflect on your credit score?

By Harper Banks

If you’ve ever had debt that you didn’t manage well, you may have wondered how long the debt would remain, or be retained, on your credit score. This is known as a “retention period” and it is governed by the law.

We have a look at how these rules apply, and the effect they have on your credit score.

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How do retention periods work?

According to Annelene Dippenaar, chief legal and compliance officer at Experian Africa, the National Credit Act (NCA) sets out the maximum time period that credit information may be displayed and used for credit scoring and assessment purposes.

“These ‘retention periods’ are applicable to both negative and positive information,” says Dippenaar. “The bureaus can hold and display the data for a shorter period, but not for a longer period.”

READ MORE: Do this if your credit score is negatively impacted by creditor error

Dippenaar says that for different categories of credit information, there are different maximum retention periods. For example:

  • Enquiries are recorded for a maximum of one year on a credit report.
  • Payment history can stay on a credit report for a maximum of five years.

Kriben Reddy, vice president of TransUnion Consumer, notes the kind of credit events to which these periods apply.

“Adverse information is anything that a potential creditor might see as negative, such as late payments or accounts that go to collections. These will stay on your account for up to one year, or until you have settled the account, whichever is the earlier,” says Reddy.

“A more serious course of action a credit provider can take is to apply for a court judgment. A judgment is public information and can remain on your credit report for five years, or until the judgment is rescinded by a court, or paid in full,” he says.

The below list, compiled by Dippenaar, notes in detail the relevant maximum periods that apply.

Credit report information

Retention period

Details and results of disputes lodged by consumers

6 months

Enquiries

1 year

Payment profile

5 years

Adverse classifications of enforcement action (when legal action was taken, such as accounts written off, debt handed over, credit card revoked etc.)

1 year, or within the period prescribed by Section 71A of the NCA (until the adverse amount has been settled in full).

Adverse classifications of consumer behaviour (when you are classified by a credit provider as a bad payer)

1 year, or within the period prescribed by Section 71A of the NCA.

Debt Restructuring

Within the period prescribed by Section 71A of the Act, or until a clearance certificate is issued.

Other Civil Court Judgments

The earlier of 5 years, or until the judgment is rescinded by a court or abandoned by the credit provider in terms of Section 86 of the Magistrates Court Act 32 of 1944, or within the period prescribed in Section 71A of the Act.

Maintenance Judgments in terms of the Maintenance Act 99 of 1998

Until the order is rescinded by a court.

Sequestration Orders

5 years, or until a rehabilitation order is granted.

Rehabilitation Orders

5 years, or until a rehabilitation order is granted.

Administration Orders

5 years, or until the order is rescinded by the court.

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