Blacklisted? There’s no such thing!

In fact, the term “blacklisting” should not have been used at all. According to an article quoting the National Credit Regulator (NCR) as far back as 2011, the term was long ago discarded from the South African credit industry’s vocabulary. It refers to a time when credit bureaus kept only negative or default data about consumers’ credit behaviour.

Blacklisting was, in essence, an informal term used to indicate negative information on someone’s credit report. It was widely used during a time when only negative data would be collected by bureaus. But the term is now obsolete. For several years, positive data has also been recorded in credit reports. This means there’s a greater number of elements included on your credit report to help lenders decide on your creditworthiness.

Your credit score is calculated using your credit report data; the higher the score, the more likely it is that you’ll be given credit by a lender. The lower the score, the higher the chance a lender may turn down an application for credit. But, even then, it does not necessarily mean a consumer’s behaviour has been bad or that they have been “blacklisted”. They may simply not meet the criteria that the lender has for granting credit.

Every month, how you pay your accounts will be tracked and will affect your score either positively or negatively. Paying on time is positive but paying late (usually longer than 30 days) or defaulting on payments (if you take longer than 90 days to pay), will likely have a negative impact. Likewise, if your failure to pay gets to a stage where a lender takes you to court, your credit report will show that you have had a judgment against you. This judgment will stay on your report for five years, unless a court of law rescinds the judgment before this time.

Paying off the debts that appear on your credit report on time will help you to prevent negative information from appearing on your credit report. It will also help to improve your credit score. The higher your credit score, the better your credit health will be.

Being able to regularly keep tabs on any positive and negative changes to your credit score allows you to intervene and track whether there has been an improvement in your score after you have taken action. Your credit score and report can determine what credit you can access, including loans and mobile phone contracts.

This is why it is vital to know your credit score, and how your credit report influences it.

• Account information - Both positive and negative repayment information is stored on the database. If your instalments are consistently and fully repaid every month, credit grantors will see that you are a reliable payer. (Duration: 3 years)

• Sequestration - A sequestration order is an order handed down by a court which declares you bankrupt. (Duration: 10 years or until a rehabilitation order is granted)

• Rehabilitation order - Once a period of four years has lapsed after a sequestration order has been handed down, it is possible to apply for a rehabilitation. If granted in court all debt incurred up to and until the date of sequestration is discharged and you no longer have to pay it. (Duration: 5 years)

• Dispute enquiries - If you claim that there is a mistake on your credit report but the credit bureau determines that the information is accurate, your complaint will be rejected. (Duration: 18 months)

• Court judgment - where a court issues an instruction for you to pay an outstanding amount (Duration: 5 years)

• Default information: Behavioural - This is the recording of information detailed as ‘slow payer’, ‘absconded’, ‘account misconduct’. (Duration: 1 year)

• Default information: Enforcement action - This is the recording of information detailed as ‘write-off’, ‘repossession’, ‘legal’. (Duration: 3 years)

*Information sourced from Experian