Having access to credit can offer a convenient solution to finance in cases of emergency. It can also make it easier to buy big-ticket items, with the added benefit of being able to repay it over a number of months.

If you have been blacklisted in South Africa, then the chances that a credit provider will extend you further credit are highly unlikely. The term “blacklisted” is quite general. It could be related to having an account in arrears or possibly having a judgement against you.

Even if you settle your outstanding debts, your credit profile remains tainted with the blacklisting. Credit providers will be aware that you may be listed as a slow payer or that you have missed payments or have failed to repay a debt. This makes you a high risk client and you may be charged higher interest rates as a result.

Being in arrears:

Being in arrears means that you may have scheduled payments and have fallen behind on those payments. At this point, no legal action has been taken. Approaching a registered debt counsellor is smart if you’ve fallen into arrears with a number of accounts or with a large asset. A debt counsellor can assist you with creating a system of repayment.

This record reflects this for a period of five years on your credit record.

Default:

When you have defaulted on payments a credit provider may hand your account over to attorneys. It’s always best to keep in mind that as long as you are still being contacted by debt collectors, you still have the opportunity to negotiate terms so that the outstanding debt can be paid off.

Your credit record will reflect that the debt has been settled in full, but the adverse information remains on your record for a period of two years.

Judgement:

Having a judgement against your name means that legal action has been taken against you. This will reflect on your credit profile for a period of up to five years.