JOHANNESBURG – “Blacklisting” is a term still freely used by many credit providers to prompt people with outstanding debt to pay up. But, blacklisting by credit bureaus was stopped many years ago. Most consumers, however, do not know this.
As recently as March this year, newspapers screamed out the headline: “Pay your e-tolls or you’ll be blacklisted”, only for the Credit Bureau Association to announce just one week later that motorists with outstanding SANRAL (the South African National Roads Agency Ltd) fees would not be blacklisted.
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 your creditworthiness.
Your credit score is calculated using your credit report data; the higher the score the more likely 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.
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 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. ClearScore.com gives people access to their credit report and score for free, forever. Since 2017, ClearScore has made it simple for everyone to check their report and actively manage their report and is South Africa’s number one credit checking service.
Content supplied by Experian.
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