How does one become credit blacklisted?
Without having the cash on hand to make large purchases like buying a car, people have to often rely on getting vehicle finance. In the past, getting credit or obtaining finance for larger purchases was a lot easier than it is today. Today, everything is recorded, and a mark on your credit history or a low credit score, no matter the reason, causes problems in many other areas. This means that a bad credit history can make for an uneasy route to getting into your own car, let alone owing one.
What exactly does it mean to be blacklisted? Being blacklisted is usually because someone has failed to consolidate their debt or meet their payment obligations in the past. So companies, who strive to protect their assets, deem these people as a risk and will deny them finance to protect themselves from potential non-repayments.
If you want to know if you are blacklisted in South Africa, you can do an ITC blacklisted check to determine if any creditors have reported you for unpaid accounts or debts. If you see that you have been blacklisted on any of these financial reports, it is important to know that there are still companies that will help you and not impose further barriers on your lifestyle.
Fortunately, being credit blacklisted is an issue that can be resolved. You can take definite steps to help you consolidate your debt and avoid being blacklisted in the future.
How to prevent being blacklisted and how to recover
When you are blacklisted, you will not be able to get credit, and the blacklist status with the credit bureau can even affect your job prospects and ability to make large purchases.
One way of improving your blacklisted status is by showing financial institutions and other businesses that you can manage any debt and keep all your accounts up to date. This will make them more willing to trust you and grant you finance for what you need. With the new world order of inflation increasing and incomes decreasing, it may be challenging to stay off a credit blacklist, but it is possible.
Pay your debt: This is the simplest way to recover from a flagged credit report. More often than not, institutions are also willing to negotiate repayment options so that you can repay your account in a way that suits both parties involved. Once you have paid your debt, you can request a letter from your creditor to the credit bureau explaining that your debt has been paid, at which point your blacklisting can be deleted. It should also be noted that creditors are not required, by law, to write these letters.
Consider debt counselling: Debt counselling is an effective way to help you manage your debt if you cannot pay it immediately. The process is longer, but it does eventually help people get out of debt. Ensure you research a company you are thinking of using to help you with debt counselling. Make sure they are reputable. You can then have your creditor write a letter to the credit bureaus absolving you of all debt obligations.
You can also prevent being blacklisted by following these tips
- Pay your instalments on time.
- Answer your phone and any letters received from your credit provider.
- Never get credit on behalf of someone else
- If circumstances prevent you from paying your accounts, communicate with your creditor and make payment arrangements.
- Check your free credit report from any registered credit bureau.
- Don’t take out more loans to pay existing ones
- Stick to a budget and don’t spend on impulse
- Be honest and build a good relationship with your credit provider.
- Be truthful when you complete a credit application.
How Earn-a-car can help you
If you have been blacklisted, you may be faced with the worry that your inability to get vehicle finance may detour you from making big, often essential purchases like getting a car. We offer rent-to-own cars in the spatially large provinces of Gauteng, Limpopo, North West and Mpumalanga ensuring that you can still be mobile on your own terms, regardless of your credit status.
Earn-a-car has set up a unique model that enables people to get the car they need and restore their credit history simultaneously. If you are blacklisted in South Africa, there is no need to worry because your credit history does not affect your approval with Earn-a-car.
All that South African citizens need to become part of the Earn-a-car programme is to have a valid driver’s license, be able to pay the monthly instalments (dependent on the vehicle you can afford), prove that they don’t have a criminal record, be able to present the required documentation and pay the once-off admin fee and first month’s rental.
No credit checks. No credit history. No worries.
Earn-a-car has assisted more than 5 000 clients over the past 10 years to get into gear and get on the road on a Rent to Own/Rent to Buy basis.
The Earn-a-car process is also flexible, so if you want to pay off your account earlier than planned, you can. Earn-a-car also understands that when you reach uphills in life, it’s always best to gear down, therefore we also offer the possibility to downgrade on your chosen car, with one month’s notice, if circumstances prevent you from paying the original agreed-upon amount.
Call us today for more information 010 880 8258.