Having an impaired credit record is an affliction suffered by almost half of the 21 million consumers in South Africa. This ranges from consumers with defaults, judgements, administration orders and consumers who were three months or more in arrears with account payments.
Recently, between 1 April and 31 May 2014, the South African government implemented a credit information amnesty that benefitted at least 3.1 million consumers.
This is great news if you struggle with poor credit records and are seeking to secure a loan, the amnesty provides you with a fresh start. It is important to note that the credit amnesty will not free consumers of their obligations to pay off existing debt.
Credit bureaus had until May 31st to scrub your credit record of negative tags such as “delinquent”, “defaulter”, “absconded” or “slow-paying” if you paid off your debts. They can keep record of your debt repayment behaviour for five years, however they are not allowed to share this information with credit providers such as banks or retailers as well as employers or employment agencies.
All of your debt still needs to be paid in full!
The credit amnesty does not allow you to access extra credit; that should be calculated according to your own affordability. Although the “black marks” will have been removed from your credit record, if you are under debt counselling, debt administration or have gone through sequestration or liquidation, these statuses will remain upon your record.
Records of action taken against you such as accounts handed over for collection, legal action or debt being written off will be removed. This is particularly beneficial if you have judgements against you as you will no longer need to go through a complex process with the courts to get the judgements against you set aside.
Remember to settle your debts timeously to avoid being blacklisted, take full advantage of this fresh start!