Why South Africans shouldn’t fear “blacklisting” anymore

Blacklisting is a term often thrown around by credit providers to threaten or coerce people with outstanding debt to pay up. However, blacklisting was done away with several years ago already – and most consumers don’t even know.

As recently as March 2019, the term “blacklisting” was thrown around as a scare tactic by Sanral and e-toll collection company ETC, as a threat to motorists who did not pay their toll fees. Both groups said that non-payment could lead to drivers being blacklisted by credit providers.

This prompted a response from the Credit Bureau Association to clarify that motorists with outstanding fees would not be blacklisted.

According to Charlie Bailey, General Manager at credit report group ClearScore SA, this is because the term “blacklisting” hasn’t been part of the National Credit Regulator’s vocabulary since 2011, and refers back to a time when credit bureaus only kept track of negative or default data on consumer profiles.

“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,” he said.

“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.”

Credit scores

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,” Bailey said.

“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.”

Bailey said that 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.

The ClearScore GM broke down the different types of negative information that could impact your creditworthiness, and how long they stay on your credit report.

Information Description Duration
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. 3 years
Sequestration A sequestration order is an order handed down by a court which declares you bankrupt. 10 years, or until rehab order
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. 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. 1.5 years
Court Judgement Where a court issues an instruction for you to pay an outstanding amount. 5 years
Default Information: Behavioural This is the recording of information detailed as ‘slow payer’, ‘absconded’, ‘account misconduct’. 1 year
Default Information: Enforcement Action This is the recording of information detailed as ‘write-off’, ‘repossession’, ‘legal’. 3 years

Read: How to calculate your credit score – and 8 ways to improve it

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Why South Africans shouldn’t fear “blacklisting” anymore