fbpx
Debt Review vs Credit Bureau Clearance

Debt Review vs Credit Bureau Clearance.

Debt Review vs Credit Bureau Clearance.

Are you struggling to cope with debt and low credit scores? We analyze Debt review vs Credit bureau clearance services in this article. In South Africa battling consumers seeking help with their debts or credit records have a variety of options to choose from. Unfortunately, there are several terms on the web that can confuse the average consumer. To add insult to injury numerous websites will deceive you into one service when that service is not suitable for your particular problem. Six of those terms are:

  • Debt Counselling
  • Debt review
  • Credit bureau clearance
  • Credit repair
  • Blacklisting repair
  • ITC Clearance

Debt review is a regulated and educational program for consumers who have trouble managing and paying their debt. These consumers will be getting declared overindebted by a debt counsellor. Credit bureau clearance is a process whereby credit reports get scrutinized and analyzed for errors. Any incorrect information gets updated or deleted. The ITC credit bureau clearance process takes a poor credit record and making changes to it to improve credit scores and creditworthiness.

South African consumers can access these above-mentioned services countrywide. Consumers struggling with debt can apply for our debt review program by completing an application form (Form 16). Consumers needing to buy a home, or a car can access our credit bureau clearance service. Credit bureau clearance takes time if outstanding debts are still outstanding. Consumers opting for Credit bureau clearance need to be mindful of the fact that to increase credit ratings and creditworthiness, accounts in default need to get paid.

We will explain the processes of what these services provide. In this article, we will also explain how to engage the services of our debt review process. We will explain why debt counselling and ITC bureau clearance may be effective at solving diverse types of financial difficulties.

  1. Debt Review vs Credit Bureau Clearance.
    1. Debt Review – The Practical Facts.
        1. Some of our debt review services include:
        2. Debt review Process:
    2. Credit Bureau Clearance / Credit Repair. 
      1. Our credit bureau clearance process:
    3. Debt review vs Credit bureau clearance - Cost Comparison
      1. 5 Benefits of using our debt review and credit bureau clearance services.
    4. Conclusion - Differences Between Debt Review vs Credit Bureau Clearance:

Debt Review – The Practical Facts.

Debt review is an effective process in dealing with debt. Our debt review process will help you as an over-indebted consumer with general financial guidance and restructuring of debt. We work hand in hand with you to save you from any legal action and repossession of moveable and non-moveable assets. Our debt review process includes working with creditors to determine the best and shortest possible period to pay off your debt.

What to expect during the initial stages of debt review!

So, you have decided debt review is the best solution for your financial situation. We need the following documents to start the debt review process.

  • Form 16 Application form. We will provide this.
  • Bank statements
  • Pay slips
  • ID Copy

We do not need you to have a face-to-face interview as this all gets done telephonically. If you prefer a face-to-face consultation, we can organize a meeting at our offices in Randburg, Johannesburg.

Some of our debt review services include:

We will offer general budgeting advice after evaluating your debt review application. You will have the opportunity to work directly with our registered debt counsellor. Together we shall investigate your financial situation, net income, expenses, investments, and insurances. We will formulate an affordable restructured plan that we will negotiate with creditors. Our proposal to creditors will include the negotiation of significantly reduced interest rates. The result will be a reduced monthly instalment to pay off your debt in about two to three years.

Debt review Process:

Step 1: Information gathering: We will need the following information for a successful debt review application:

  • Net Income and extra income. (Pay slip and bank statement).
  • A comprehensive list of monthly living expenses. These expenses are necessary for basic daily living. Living expenses include rent, food, medical aid, and transportation costs. These expenses do not include your debt obligations.
  • Any information relating to car repossession and home repossession threats from creditors.
  • Any letters or correspondence you had with attorneys and debt collectors.

Step 2: Application and discussion with your debt counsellor. Your debt counsellor will review your current financial situation which includes:

  • Income
  • Monthly living expenses
  • Monthly debt repayments

After a telephonic or in-person consultation, the debt counsellor will advise you of the best way to pay off debt. This will include a restructured reduced monthly instalment which gets paid over to your creditors. This reduced instalment will include reducing interest rates. 

Step 3: Negotiation with creditors

Your Credit Salvage debt counsellor will now approach creditors and start the negotiation process. We will work with the credit providers to develop a restructured plan to pay off the outstanding debt within a respectable term. During this phase, your Credit Salvage Debt Counsellor will offer you insights and recommendations based on your situation. We will brainstorm ways to increase your income and where to cut your expenses to pay off debt. We have committed ourselves to do what is in your best interest.

Step 4: Execution of the debt elimination plan.

Your debt counsellor will declare you over-indebted and send out a notification to your creditors. This notification will include a repayment proposal with reduced interest rates. We will send you this proposal for you to know the exact payment plan while under debt review. The documents you will receive include:

  • Form 17.2. This is the notification to inform your creditors you are financially overindebted.
  • A comprehensive budget overviews! This is our overview of your current financial situation.
  • Proposal and cascading calculations. This is our action plan, detailing the payments your creditors will receive over the term.

The last step to put these strategies into practice is your commitment to pay the restructured instalment monthly. To start paying off debt and improving finances using a detailed debt review plan is a rewarding journey. During the debt review process, you will develop better budgeting and spending habits. These good financial habits will enable you to maintain financial stability while you work towards your dream of becoming debt-free.

If you do not have a problem with debt and are not deemed to be overindebted credit bureau clearance will be a better solution. The next section of debt review vs Credit bureau clearance will discuss the Credit Bureau Clearance process.

Debt review vs Credit Bureau Clearance Credit Salvage

 Above we have an illustration of Debt review vs Credit bureau clearance. Please take note of the main differences between the two services. 

Credit Bureau Clearance / Credit Repair. 

The next section of this article Debt Review vs Credit Bureau Clearance is the process of Credit Bureau Clearance. ITC credit bureau clearance is based on your credit report and current credit scores. The National Credit Act allows consumers to receive a credit report free once a year from each bureau. To start the credit bureau clearance process, it is important to know what is currently reflecting on one’s credit record. We offer a full investigation with each credit bureau making the process of establishing what is adversely impacting a credit score and creditworthiness straight forward and simple.

Our Credit bureau clearance service assists us to dispute, review and update your credit records. Our process includes the removal and updating of fraudulent, negative, false, and adverse information from your credit record. You can also attend these services without employing the services of a company like ours. Attempting credit bureau clearance takes time if you are not familiar with dealing with bureaus and what is enshrined in the National Credit Act. If you are looking to purchase a home or car, we would recommend us to assist you with this process.

Our credit bureau clearance process:

Working with you we review all your credit reports and analyse your credit scores. After consultation with you, we identify prescribed accounts, written off debts, fraudulent accounts, and adverse information. We then start the process of removing and updating the above-mentioned accounts. These are the accounts that are affecting your credit scores and creditworthiness.

During the ITC credit clearance process, we would request you not to apply for any new credit. Any declined applications will affect your credit scores and will be counterproductive.  Another important aspect during the process is that we would need you to keep on making payments on existing debts on time.

We have 18 years of experience in dealing with debt, creditors and credit bureaus and will ensure you have a credit record you can be proud of.

If you are not that confident in your skills to attempt credit bureau clearance alone, it would be wiser to invest in our skills and 18-year experience. You will feel comfortable with the process since we have a proven record of accomplishment and are established. Additionally, we have numerous unbiased excellent reviews from our past clients.

If you need one of our consultants to contact you, you can use one of the following:

  • This email address is being protected from spambots. You need JavaScript enabled to view it.us and we will contact you back
  • Use our contact us page to complete your details and a short text regarding your issue and we will call you back.
  • To apply online for credit bureau clearance and debt review removals please visit our credit repair application page
  • You may contact us using our chat feature which is situated at the bottom right of each page. 

Credit Salvage Credit clearance online application

Debt review vs Credit bureau clearance - Cost Comparison

In this next section of debt review vs credit bureau clearance, we discuss the cost comparison. Debt review is a regulated process, and fees have been set in stone through the National Credit Act. We have published a comprehensive debt review fees article. Please click the link to read more about the debt counselling fees.

Credit bureau clearance companies are currently not regulated, and you can expect some hefty fees. Some companies will even charge you upfront and then do not deliver on promises made. These businesses are using misleading methods, including false advertising and we urge you to be cautious when dealing with companies like these. Do research on the Hello Peter website and investigate their google ranking.

5 Benefits of using our debt review and credit bureau clearance services.

  • We are a boutique firm, and we do not accept more than a certain number of clients a month. This ensures world-class customer service for each client. Our clients are not just another number.
  • We are successfully registered, and our debt review fees are strictly in line with National Credit Act regulations. To confirm our registration please visit the NCR website by clicking the link.
  • We charge a nominal fee for credit bureau clearance with NO hidden costs. We are delighted to also mention that we are currently South Africa’s most highly cost-effective company offering these services.
  • In addition to credit bureau clearance services, we are also providing a host of other benefits for each client to enhance our customers’ experience.
  • Start with us with complete confidence! Our 14-day guarantee is clear, simple, and condition-free.

Our specialized credit bureau processes, debt and credit expertise, superior customer service with excellent reviews is making us the best in the industry. We pride ourselves that we have had the chance to help thousands of South Africans correct and improve their debt and credit records. We are here and ready to help you too.

We have already analyzed Debt Review vs Credit Bureau Clearance Services. If you have any questions or still do not know which service is best for your situation, contact one of our specialists. We will analyze your situation for free and advise you of the best solution for your needs.

Other interesting articles:

Conclusion - Differences Between Debt Review vs Credit Bureau Clearance:

The only thing Debt review vs Credit bureau clearance have in common is they are both there to help you to get a handle on your finances in one way or another.

Debt review takes a more comprehensive approach in dealing with outstanding debt. Debt review analyzes your income, living expenses, and debt. This process in the long run teaches you how to budget and to get debt under control. This valuable attribute is essential to getting out of debt. On the other side of the coin, an ITC credit bureau clearance process only deals with credit bureau reports. You can utilize the services of our firm to deal with this process professionally at a fraction of the cost.
 

Which service is the correct solution for You?

If you struggle with maintaining monthly debt repayments and you need professional help steering your way through some messy finances, debt review will be the answerIf you do not have issues with debt and are looking to improve credit scores for future credit acquisitions, then ITC Credit Bureau clearance will be your answer.
 
 
CreditSalvage logo 200
Low Credit Score Guide

Low Credit Score Guidelines

Low Credit Score? Ultimate guide on how to increase Credit Scores.

Is a low credit Score getting you down? If you are struggling to qualify for credit facilities and your credit score is not as respectable as you would like it to be and you are questioning what can get done about it, then, you have landed at the right article. This short feature is a list of pointers you can follow to increase your credit score and fixing your creditworthiness.

Before we get into our life-changing recommendations, we first need to explain what a credit score is and look at why you have a low credit score. Each credit-active consumer generates a credit score.

Credit Score, what is it?

A credit score is a three-digit number which gets calculated by a credit bureau. In South Africa, we have over 20 credit bureaus, but the main credit bureaus credit providers use is Transunion, Experian, Compuscan and XDS.

This all-important three-digit credit score number indicates the likelihood for a consumer to repay the credit facility.  Having a high credit score means you will be a low-risk applicant and will get approved for credit. Having a low credit score means you are a high-risk applicant and will immediately get declined for credit.

Why do I have a low credit score?

A consumer’s credit score gets affected by their financial habits. The following factors affect a credit score negatively:

  • Maxed, out credit facilities. Example: credit card reflects a credit limit of R10 000, and the balance reflects R10 000. This example will be a sign that the consumer is living on credit.
  • Attempting to get approved for multiple credit facilities in a short period.
  • Many one-month loans. These type of payday loans or one-month loans are bad for credit score.
  • Missed payments. These missed payments will have devastating adverse effects on a credit score.
  • Collections information. Example judgments, defaults, trace alerts and notices.

Now that we know what a credit score is and why a credit score is low, we can now look at our suggestions to increase a low credit score.

6 causes consumers fall into the debt trap Debt counselling Solutions

Step 1: Do not skip any payments.

When attempting to fix your declining low credit score, it is crucial not to skip any of your current monthly account payments. You will never be able to increase your credit score if you miss even one payment. A missed payment will get recorded on your profile, and it will remain visible for five years. Credit providers will have access to this historical information for up to 5 years. A skipped payment will have negative consequences on your credit score. This negative indicator on your profile will be counterproductive in your quest to increase low credit scores.

Start by consistently and without fail pay all your accounts which are due on time. On clothing, credit card and revolving loan facilities pay at least a little bit more each month. On these, accounts also ensure that you do not spend more than 50% of the available credit limit.

Step two: Evaluation.

You ought to evaluate your financial situation and credit report monthly. This evaluation is crucial to establish how much debt you have. With this information, you will be able to plan to pay off the outstanding balances. By doing this, you might discover that your financial situation is not as bad as you believed it was.

Step three: Stay away from sequestration.

Whatever you do, try not to apply for sequestration or administration processes. If you struggle to maintain your monthly repayments to credit providers opt for debt counselling instead. Repairing and working on a low credit score is far more challenging after you have accepted to get placed under sequestration. It is crucial to make every attempt to find an alternative to get help in dealing with debt. Some companies will make overindebted consumers believe that the Sequestration process is a debt cure-all process to sign you up. The sequestration process will end up being a huge financial mistake. These two processes will have you blacklisted on the credit bureau for ten years. For more information about the consequences of being sequestrated please click the following link - Consequences of sequestration.

Step four: Using a credit card or clothing account to boost a low credit score.

Another effective way to increase and boost credit scores is to pay for some of your daily living expenses with your credit card. At the end of the month, pay off the credit card in full. Do the same process for a couple of months and see your credit score climb. Remember not to exceed more than the 50% credit limit.

Step five: Supplement your income.

Our next suggestion is to increase your income. Do what you can to increase your earnings levels to assist with the paying off debt. This boost to income will also increase debt to income ratios. Credit providers rely on your debt to income and play an important, part in most credit scoring modules. If your debt to income is high, we recommend paying off accounts to improve this ratio. The best way to do this is to supplement or boost income levels. The following list is some examples of how you can increase your income.

Register to do online paid surveys. There is a whole list of websites who will pay you for your time and feedback on surveys.

  • Become a part-time uber driver if you have a suitable vehicle.
  • Sell any unwanted goods you do not need on Junk mail, Olx, Facebook and Gumtree. Please ensure you follow the safety guidelines when dealing with private buyers.
  • Start a small business on the side to generate extra income.
  • With the extra income, you need a disciplined approach to pay off debt. Use this income to pay off debt and nothing else until you have reached the ideal debt to income ratio.

 

Were here to help with low credit scores

 

Step six: Prioritise in removing listings.

Number six is to make sure your credit report is free from any negative, or adverse listings. These listings include defaults, court judgments, trace alerts and legal indicators. These listings have a high impact on credit scores. Get these listings settled as a matter of urgency and liaise with all the bureaus to get it removed. Our credit clearance service may be able to assist if you get stuck or need professional assistance in getting these listings removed. Also, read the following articles to assist you with adverse listing removals: Ultimate Credit score GuideBlacklisted, Creditworthiness, credit scores and Affordability and 20 Essential Tips for Blacklisted Consumers to get out of Debt

Sources - Other good reads

 Step Seven: Adopt good habits.

The final step is to develop and adopt smart spending habits. The best way to adopt a sound spending habit is to draw up a budget. A budget should accurately reflect the exact income and exact expenses. The expenses must be accurate to succeed.  A carefully planned budget will assist you to live within your means. Having a habit of living within one's means will ensure you can avoid the risk of getting overindebted. 

Step 8 – Save money wherever you can.

To be successful in your quest to increase credit scores, you need to reduce debt. You will also need to live within your means to make a difference to your financial standing. Budgeting will be crucial to this quest. Following a strict budget will be beneficial for your finances and credit scores. Besides sticking to a financial budget, you should also live every day looking for opportunities to save money. It is advisable to start forming a habit of making mindful choices when using your money.

We have added a list of opportunities where you may find our top cost savings recommendations.

  • The first thing is to deal with the high cost of electricity. Adjusting your geysers thermostat down to a temperature of 55 degrees will save you money on your account. Another way to save on your monthly account is to cover the geyser with a geyser blanket. The blanket will act as insulation and will stop the geyser from heating up unnecessarily. dealing
  • This suggestion is not a liked one, but you should consider cancelling your DSTV service. There are cheaper alternatives, for example, Netflix and Showmax for a fraction of the cost. If you are sceptical, to make this change, ask yourself how much time do I sit in front of the television? You will surprise yourself at the answer.
  • Consider cancelling any newspaper and magazine subscriptions. Not only will it be good for the environment, but you will also be able to get your daily news from the web all for free.
  • If you rent a property, consider finding a cheaper place to rent. This change may save you thousands of Rands each month. When looking for a more affordable property to rent, remember to make sure the levies will cost you less.
  • Avoid junk food and fast-food outlets or at least consider eating out less.
  • Eat at home before you go to the movies. Cinema snacks can add up to be expensive for what you get.
  • Cut down on smoking and drinking. Not only is this a bad habit for your body, smoking and drinking also causes financial stress on your budget. Once you manage to cut down or stop entirely, you will start to see an improvement in your finances.
  • Consider cutting down on red meats and replace it with chicken. Chicken is cheaper and healthier.

Final Thoughts on how to raise your low credit score:

  • Track your credit score. Subscribe to all credit bureaus for a minimal fee and work on problem areas as they come up.
  • Set up a financial budget and try not to deviate from your monthly spending plan.
  • Set up debit orders to pay accounts and use reminders to remind you of making payments. Setting up these reminders will assist you in making payments on time if you opt to pay electronically.
  • Avoid payday or one-month loans. These accounts will harm your credit score and creditworthiness.
  • Work hard on reducing debt levels. As you work on decreasing account balances, your debt utilisation ratio will improve and in turn, boost and increase credit scores.
  • Avoid unnecessary credit checks and only apply for new credit facilities when necessary.
  • Request increases on current credit limits on your credit card and clothing accounts without maxing out the facilities. A higher credit limit will increase your credit utilisation ratio and again will improve your credit scores.

The purpose of this article is to show you that you do not have to be a financial expert to have an excellent credit score with all the bureaus. You should find it a bit easier now to increase a low credit score. You can do a lot of simple things as advised above. The most important fact is that you start now and keep on going at it until you have reached the desired credit score level.

Car Repossession - How To Save your vehicle

Car repossession

Car Repossession! What Happens and How To Save your vehicle.

Car repossession troubles? We have compiled this article to explain the process and what to do to save your vehicle. Currently, South Africa is going through a rough patch due to the Covid 19 pandemic, a slowing economy and electricity costs are always on the rise. 

Indeed, times are tough, and it is only a matter of time when the economy will affect you. Those who are already struggling with debts experience that they cannot afford their living expenses. With all these hurdles to overcome, many consumers are faced with the reality where their car might get repossessed. 

Repossession of a car can leave you in a state of emotional distress. There are also the agony and shame people feel when collectors come knocking on the door to repossess. Everything soon feels to go amiss, especially when you have kids. How will you take them to school? Or worse, what about medical emergencies? So, it is understandable that everyone wants to protect the possession of their vehicle. But what happens if you can't afford to pay the instalments anymore?

Your brain will be working overtime causing sleepless nights and even depression. Although you have the right to get worried, there is a legal process that we will discuss in detail to avoid the repossession of your car. This process we are referring to is debt counselling which is also known as debt review. This process will protect and teach you how to protect your vehicle and other assets. Indeed, repossession of a car can feel like a knife in the gut, but there is one uncomplicated way out. 

Your savior: Debt review. Care to know what Debt Counselling in South Africa is? 

It's a process that's going to save your vehicle from getting repossessed. We will discuss it in detail how this process will afford you the legal protection against repossession.

But first, we will discuss the vehicle repossession processes in detail. This information will assist you to overcome this stressful situation when faced with a car repossession.

When Does a Bank Attempt Repossession? The first 90 days of the repossession process.

Your vehicle is at stake when you stop making payments that are due monthly. These instalments are the agreed-upon specified instalment as stipulated in your finance agreement.

Not paying your monthly instalment for one month in certain circumstances might be justifiable. If you let three months go by without payment to the credit provider, that's when things will start turning for the worse.

Banks will start the repossession process after receiving no instalments for two to three months. The bank will first commence with soft collections to try and collect any arrear amount. They will try to reach out to you by contacting you via e-mail or telephone. If you don't respond and ignore these calls and e-mails, consider yourself in trouble. Most consumers make a mistake and avoid the situation entirely thinking the problem will go away. Ignoring the problem will escalate the collections process and will jeopardies any future payment arrangements with the bank.

Finding a collector who wants to repossess your vehicle at home or work might be a frightening idea, but we will explain how to deal with the repossession of the car.

Keep reading to find out more.

Car Repossession and Voluntary Surrender. 

The future of a consumer's ability to repay debts always remains unpredictable. Life has a way to surprise us with unforeseen crises such as medical emergencies, life-threatening illnesses, retrenchment or even divorce. These sudden surprises can make it challenging to repay debts and vehicle finance accounts on time. 

When it comes to a car, there are two things that you can get confronted with if you haven't been paying for the vehicle you bought using bank finance, namely voluntary surrender, and repossession.   

Car Repossession.

Vehicle Repossession will harm your credit report. This negative information will cause any future credit applications to get declined. 

A bank can only repossess a vehicle through a court order. After exhausting all possible avenues to collect the arrears on a delinquent vehicle finance account, a bank will approach a court to repossess your vehicle. We know it seems daunting, but you have options to prevent this court process from proceeding. We will discuss the debt review process later on in this article. 

The Consequences of Repossession.

A large majority of struggling consumers ignore a summons and don't appear for the court hearing. The court will grant a default judgement in the bank's favour if the consumer does not appear to defend the summons. The bank will now have the required court document to repossess the vehicle. 

On the other hand, if the purchaser goes to court to defend the matter, they can present their defense. Here, getting an attorney to assist would be helpful.

Voluntary surrender: if you have not defaulted on any payments but can no longer afford the instalment.

A voluntary surrender occurs when you are struggling with the monthly payments and, you make arrangements with the bank to return the vehicle. The National Credit Act states that you can provide a written notice to the bank indicating that you want to return the car. This voluntary surrender means that you will lose the vehicle and potentially must pay any shortfall amount after the auction. Surrendering the car voluntarily, allows you to avoid the embarrassment of repossession and expensive legal fees.

Within five business days, you must surrender the vehicle to the bank. After the bank accepted your car, they will send it for an evaluation to determine the value. The bank will send you the valuation value. Next, the bank will recondition the vehicle to ensure the car is ready for auction. Any reconditioning work which gets done will get added to the outstanding balance. The credit provider will then auction your vehicle to recoup some of the costs.

There are no guarantees that the bank will sell it for the amount which is still owing on the contract. You need to pay any shortfall amount after the vehicle got auctioned. Similarly, if your car gets sold for a higher price, any excess balance will be refunded to you. Please note that this does not happen very often, and, in most cases, there will be a shortfall. 

The Consequences of opting for a Voluntary Surrender 

There will always be a downside when trying to deal with debt and missed vehicle payments. Banks will come knocking as soon as the vehicle finance account is two or more months in arrears. It is a fact that banks prefer not to repossess vehicles. Unfortunately, if you are not making payments to cover the interest, they will proceed with repossession. The banks prefer voluntary surrender as opposed to lengthy court proceedings to get their asset back. Consumers need to be aware that they are under no obligation to return their vehicle at this stage if they don't want to. 

The credit provider will first get collectors to give you the option to surrender the vehicle voluntarily. The collectors will present you with a document when they come to collect. If this document is not a court order, it is an agreement to surrender the vehicle voluntarily. 

It is important to note that you do not have to sign this document or surrender the vehicle during this stage. Never give in to these sometimes-aggressive collection practices from the collectors when they want to repossess. Some external collectors, who are not employees of the bank, will mislead the consumer into believing that the document they present is a repossession order.

If you can settle the arrears, contact the bank, and arrange to pay the arrears. If your unable to pay the arrears and are willing to surrender the car, you can do this at this stage. If you are unwilling to return the vehicle at this stage, it is vital to contact us to get legal protection using the debt review process. 

Get Some Help with Your Debt. Before the bank approaches a court for a repossession court order.

According to a reliable resource, almost 50% of South Africans with credit accounts are in debt with delinquent accounts. Many people end up on the wrong side of debt collecting agencies, or worse, they apply for further credit or loans to pay off their current debt, only to discover themselves in remorse. Therefore, get help today!

If you need one of our consultants to contact you, you can use one of the following:

  • This email address is being protected from spambots. You need JavaScript enabled to view it.us today and we will contact you back
  • Use our contact us page to complete your details. please include a short text regarding your issue and we will call you back.
  • To apply online for credit bureau clearance and debt review removals please visit our credit repair application page
  • You may contact us using our chat feature which is situated at the bottom right of each page. 

Your solution to vehicle repossession. Debt review/ debt counselling

The National Credit Act provides for debt counselling to deal with debt and the safeguarding of assets. If you get into the unfortunate position where the bank wants to repossess your vehicle debt review will be your answer against repossession. 

This debt review process helps consumers who are struggling with their repayments through legal negotiations with credit providers. The debt review includes budget advice and debt restructuring.

There's more to debt counselling than budget advice, safeguarding of assets and restructuring of debt. We will dive into the details. 

Car repossession infographic 2021 CS

Car repossession - Above is an infographic of the 5 stages of repossession.

What is Debt Counselling?

Debt counselling is a debt relief process in South Africa that helps customers get out of debt. The program was initially introduced in 2007 by the National Credit Act (NCA). Debt review aims to assist consumers in protecting their assets. The process also aims to combat high debt levels. This process is perfect for South Africans who find themselves overindebted. This process also aims to assist consumers who are falling deeper into debt and not having the ability to deal with it.

Debt review is uncomplicated and a more reliable solution than most consolidation loans. Consolidation loans often turn out to be a short-term solution and do not combat high debt levels. We recommend you contact us to enquire if this process is the best solution for your situation. Moreover, if you are suffering from over-indebtedness, you can approach a debt counsellor to guide you through the legal process. This is process is more than just a rescue-plan; it is a systematic approach to deal with debt and car repossessions. 

Within 120 days of the car repossession process, it is vital to apply for debt counselling. Contact us immediately when faced with repossession. We will stop the repossession process and restructure your vehicle finance account together with all your other debts.  

We will now discuss the benefits of debt review.

Benefits of Debt Counselling/Debt Review 

An inexpensive monthly budget

While taking part in the debt review process, your debt counsellor will present you with a new and affordable monthly budget. This new budget will include a repayment plan altered to your

living expenses. You will now be able to afford your monthly living expenses while paying off debt and your vehicle. During the process, you will receive guidance and advice on how to handle your funds to ensure a happy and debt-free future.

Restructuring of debts 

Your debt counsellor will restructure your debts and soon after will you enjoy legal protection while paying a reduced instalment. The only requirement from your side is to ensure this reduced instalment gets paid each month. 

Negotiating with credit providers

The debt counsellor will deal with credit providers. The consumer will no longer need to deal with collection agencies and creditors. Negotiations are easier under debt counselling. The debt counsellor will be responsible for this. The focal point of discussion would be to prolong your debt repayment terms to reduce the monthly instalment. 

Read more about the benefits of debt counselling.

You May Require Debt Counselling / Debt Review If:

Here is when you need to approach a debt counsellor:

  1. Your credit card, clothing and revolving loan accounts are all maxed out.  
  2. You have missed payments on your debt obligations.  
  3. You don't have enough money left to pay for living expenses
  4. You feel depressed about your finances
  5. You are selling some of your goods to pay for living expenses and to pay for debt instalments. 
  6. Instead of dealing with your current debt situation, you are applying for more loans.

Read more about the debt review costs involved when you opt for this process.

Avoiding Repossession

It is possible to dodge repossession as advised above through debt counselling. As soon as your payments start to pile up or you can't manage the repayments on your debt, take immediate action. Do not wait until the debt collector visits you at home or office to repossess. Negotiations with your credit provider will fail without the help of a debt counsellor. 

If debt counselling is not a viable solution for you, you could also opt to sell the car and go with something within your budget to control your finances. Please keep in mind to purchase a vehicle on finance again needs a clean credit record with a decently high credit score. if you need to increase your low credit score you can read our guide by clicking the link.

 

Car repossession How to save your vehicle Today

Meaning of Blacklisting

Meaning of Blacklisted

Blacklisted? What is the meaning of being blacklisted or blacklisting 

The term blacklisted or blacklisting is a widely used term to describe when a consumer is unable to qualify for new credit facilities. These rejections are due to an impaired credit record and not due to the consumer being on a blacklist. An impaired credit record is when there is a record of non-payment of outstanding debts on loans, credit cards, bonds and clothing accounts. As this overused phrase "blacklisted" is being used there is, in fact, no blacklist out there. Consumers cannot get blacklisted as getting blacklisted does not exist.

In South Africa, credit bureaus report on consumers payment behaviours. Should a consumer have a poor repayment credit profile, prospective credit providers will decline new credit facilities. This rejection does not mean that the consumer is on a blacklist.

A credit report is a snapshot and history of a consumers' payment behaviour. The history of this information may reflect on their credit report for a period ranging from 1 year – 10 years. The information on a credit report includes good and bad payment behaviours. Consumers see negative information such as judgments or having a poor payment profile as being on a blacklist.

These consumers assume that they have now been blacklisted.

Having a low credit score due to negative information might also get misconstrued as being a blacklisted consumer.

There is good news for consumers who find themselves with a poor credit record and who believe they have been blacklisted. A credit report can get worked on.  Consumers who work on certain aspects on their payment behaviour can turn an average credit report back to good. We will discuss later in this article how to improve credit scores.

What does it mean to be blacklisted or to have an impaired credit record?

The following adverse information will negatively affect credit scores. This negative adverse information will result in a consumer having an impaired credit record or alternatively known as being blacklisted.

  • Judgment information. Non-payment of accounts will result in credit providers seeking help from the courts to demand payment. A summons will get issued and if the matter is not defended in court a default judgment will get granted. This judgment information will reflect at all the credit bureaus. This adverse information might prevent consumers from getting future credit applications approved. 
  • Default enforcement listings. Non-payment of an account will result in credit providers seeking help from collection agencies to collect money. These collection agencies might report to the bureaus that legal collections are underway. An enforcement default will reflect on the consumers' profile. This listing influences credit scores.
  • Debt review or debt counselling indicators: Consumers who are under debt review will have a debt review indicator on their credit profile. Debt counselling a debt relief measure in the South African National Credit Act (NCA) in 2007. This debt relief measure is intended to assist over-indebted consumers. In terms of the Act, a debt review indicator will reflect on the consumers' profile. The over-indebted consumer will not be able to take on any new debt. As this is not a negative listing, consumers will regard this listing as getting blacklisted. 

The following factors affect a low credit score. 

  • Many enquiries made in a short period.
  • Adverse information as discussed above.
  • High balances with current credit providers.
  • Many Payday or 1-month loans on the credit profile.

 

Meaning of being Blacklisted min

How does a consumer know if they have been “blacklisted”?

The following will give a consumer a sign that there is negative information on their credit record.

  1. The consumer got declined for:
    • New credit facilities.
    • Employment.
    • property rentals.
    • Bond and vehicle finance applications.
  2. Received a summons to appear in court for an unpaid debt.
  3. The consumer is aware of a history of late payment towards current and past debt obligations.
  4. Credit bureau investigations. The National Credit Act provides that South African consumers are entitled to their credit report free of charge once in a year. Consulting this free credit report a consumer can establish if there are any negative information.

The 4 main credit bureaus are

To access their contact details please follow this link Credit Bureau Contact information

How to prevent getting blacklisted 

Pay all debt instalments on time in full. Paying even ten Rand less than the instalment due will reflect as a negative indicator on your payment profile. This negative information will affect credit scores.

  • Contact your credit provider immediately if you are unable to pay the minimum instalment due. 
  • Apply for debt counselling if you are unable to service your debts monthly. The following article will explain Debt Counselling or if you need assistance with debt counselling you may consult the following page GET DEBT HELP
  • Never ignore telephone calls from credit providers and collection agencies.
  • Regularly inspect your credit report. Dispute any inaccurate information with all the bureaus. For more information on Credit Clearance please click on the link.

Tips on avoiding the Blacklist

 

What to do if you have been “blacklisted” or have an impaired credit record.

If you know that you have been "blacklisted" or got rejected for credit facilities, you should understand thousands of credit applications get declined each month. The most important factor after getting declined is to establish the reason for the rejection. 

Step 1 – Speak to the credit provider who rejected your application.

Enquire with the credit provider because your finance application got declined. The credit provider will state to you any of the following reasons.

Step 2 – Stay calm if you have been “blacklisted”.

It is vital to stay calm and consult your credit report after a rejection. Applying with a different credit provider without fixing the problem is not a good idea. This extra application will result in your credit score getting penalized. Applying for many credit applications in a short period will damage a credit score.

Once you make a credit application, this enquiry will get recorded on your credit report. Prospective credit providers will assume that many applications, in a short period is a sign that you are in desperation seeking credit. Credit providers avoid granting credit when this danger sign is present.

Step 3 – Check your credit report if you have been “blacklisted”.

Should the credit provider who rejected your credit application tell you to investigate your bureau report stay calm as advised above? Refrain from applying for credit again with a different credit provider.

Before doing anything else, consult your credit report. Every credit-active consumer has a credit report. A credit report is a record of your details which includes a payment profile of how you have been conducting past and present accounts.

Prospective registered credit providers will have access to your credit report with your consent. Credit providers will do an in-depth assessment of your credit report to predict how likely you are to repay the debt.

Contact Us to get an affordable four in one credit report from all major credit bureaus. Purchasing this report will make the process of establishing if you have been “blacklisted” easier. Our four in one credit report includes your credit reports from Transunion, Experian, XDS and Compuscan. Having this complete report will give you the power to check adverse, payment histories and enquiries all in a one easy to read a Credit report.

 

Credit Salvage Credit Clearance online application

 

Step 4 – Know your debt-to-income ratio

Another reason a credit provider will decline a credit application is if debt levels are too high. This rejection does not mean that you have been blacklisted. Registered credit providers will scrutinize outstanding debts. A high debt to income ratio will ring alarm bells for credit providers. A credit application will get declined if a net salary is close to monthly debt commitments. In the following example, we will illustrate this scenario.

John is working for a mine and has a net income of R15 000pm. He wants to buy a car as his employment contract requires shift work and public transport is not available when he is working night shifts. John already has unsecured debts totaling R125 000. The total repayment on his unsecured debts amounts to R8 000pm. John has never defaulted on any of his accounts and has a good credit score. The new vehicle instalment will be R3 500. Johns' application will get declined as his debt to income is too high even though he is not blacklisted. Credit providers will be hesitant to approve an application where more than 50% of credit limits have been used.

Where possible ensure that your debt-to-income ratios are kept as low as possible. Keeping an eye on your debt-to-income ratio will ensure that you will not fall into the dreaded debt trap in future.

Step 5 – No Credit history does not mean you have been blacklisted.

Application for new credit will be hard to get if there is no current credit history on file. Credit providers will use historical information to assess how likely you are to repay the debt. If there are no history credit providers will be unable to establish if you can repay a new credit facility. This lack of information will increase your chances of getting the application declined. This rejection does not mean that you have been blacklisted.

To start building a credit history is to start with smaller clothing accounts. Open one account and repay the account well for a couple of months before applying for credit again.

 

Start working on your profile and avoid blacklisting.

Impaired credit records are a real problem in South Africa which is currently suffered by more than half of the consumers in South Africa. The adverse information ranges from judgements, enforcement action defaults, administration orders, sequestrations orders. This information includes struggling consumers who were four months or more in arrears. These consumers are not regarded as being blacklisted but are likely to default on future credit agreements.

At Credit Salvage, we assist blacklisted consumers with impaired credit records with a range of services, Credit ClearanceDebt Counselling and numerous other services. Contact us today, and we will analyze and advise of the best plan of action for your situation.

Sources - Other good reads

 credit clearance header

Subcategories

Quick Links

                             

                              Home       About Us       Debt Counselling       Credit Clearance       Resources       Calculator       Blog      Client testimonials                                 

X

Right Click

No right click