How can you avoid being blacklisted? A staggering number of South Africans are finding themselves blacklisted. As a result of having a bad credit record.
In times of a global economic crisis, people find themselves increasingly unable to meet all their living expenses. As well as debts causing people to default on credit payments.
Being blacklisted has various limitations because lenders and employers may be wary of you. Particularly if you have not been able to be a good credit holder in the past.
Having a bad credit record means that you have borrowed money or bought goods on credit. But you haven’t managed to pay the required payments on time.
This information is recorded and the data is included on your credit history.
If you have proven to be a bad credit holder and have a poor credit record, this could land you on the blacklist. You may have difficulty getting any kind of loan. Or taking out a cellphone contract, financing a home or vehicle. Or even opening a bank account and landing a job.
Should a lender agree to lend you money, the interest rates for you will often be much higher than for a credit-clean candidate.
As a blacklisted individual, you will be regarded as a high risk borrower. And the lender will have doubts about your ability to repay them. So, how can you avoid being blacklisted?
Debt counsellors help you avoid finding your name on the blacklist by restructuring your debt and financial commitments.
A debt counsellor will assess your income, debts and living expenses and help you come up with viable solutions for you to pay off the debts you have.
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They can also negotiate with people you owe money to and suggest the amount you are able to pay. As well as the length of time you need to pay off what you owe.
The National Credit Act 34 of 2005 made debt counsellors available that can help approach your creditors. And offer a repayment plan that fits into your budget.
Avoid Being Blacklisted by Using a Debt Counsellor
Using a debt counsellor should be your first port of call if you begin to feel uneasy about being blacklisted.
Rather than wait until you find yourself overburdened and on the blacklist. Consulting a debt counsellor immediately will allow you to restructure your debt into a manageable plan. Before the situation becomes more serious.
The debt counsellor will also be able to give you financial advice to help you avoid getting into financial trouble. In addition help you make better decisions in the future.
To avoid finding yourself blacklisted, always pay your debts on time. This will also help you to avoid incurring extra interest rates and fees.
Late payments will show on your credit report and will not stand you in good favour with the blacklist crew.
If you will be going on holiday or won’t be able to pay at the usual time for some other reason, you should make arrangement with your creditors beforehand. So that you can make a payment plan to accommodate your situation.
That being said, don’t sign anything before consulting a lawyer to ensure that all is in order. You must also inform creditors when you change your address. So that they will know where to bill you.
Use Wisdom to Pay off your Credit
Tip: Don’t use credit to pay off credit. This will just land you in more hot water.
If you are struggling to pay one debt, don’t pay it off with another credit card. Or take out a loan to cover the cost.
Rather seek the services of a debt counsellor who will be able to advise you on the best way to pay your dues.
Prevention is better than cure, as it can be difficult to clear your name from blacklisting. Even if you pay the money you owe immediately. This is why it’s important to take these steps and avoid finding yourself in debt in the first place.
Follow some of the financial guidance above. It could help you know how to avoid being blacklisted in South Africa.