Have you ever seen those posters and advertisements that say they will fix your credit rating? Well don’t get too excited, their claims are pure fiction. If you have you been legitimately blacklisted by a company or in other words you have a judgement against you at the credit bureau, it is impossible for an outsider to fix. The only instance where their help may be useful is if you have been wrongfully blacklisted. Even then they will do nothing that you can not do for yourself. So instead of shelling out cash for a service that may not deliver do some homework.
There are two main credit bureaus Trans Union ITC and Experion, almost all companies that extend credit subscribe to them to get information on potential clients. In turn, the credit bureau gets information from members that subscribe to their services. If you do not pay your accounts the credit grantor (retail store or bank) sends the information to the bureau. When a judgement is handed down for non-payment this information stays on your credit record for 5 years. Even if you then pay the bill, the adverse report will remain on your record.
In past the law made no provision for the removal of a valid judgement. Thousands of people who desperately needed to have the judgement rescinded were left in a catch 22 situation. Even though the debt in question had long since been repaid nothing could be done about it. Judgement debtors would literally beg their former creditors to either intercede with the credit bureaus, consult with attorneys and/or advocates to try to find loopholes in the judgement. They had to lodge successive appeals with the credit bureau’s to remove the judgement from their credit records, often without success. Where the judgement was properly taken, it was often impossible to get the court to remove it. Now individuals can clear their name, provided the debt has been paid.
Steven Logan, senior partner of Logan Attorneys, one of the leading firms specialising in this area, says that individuals can have judgement rescinded (removed) via a simple legal process. However, and this is a big condition, it has to be done by a legal professional, and they do not advertise on street poles. While an application must still be made to court, in the vast majority of the cases the applications are be granted.
All an attorney needs to do is obtain the creditor’s consent to the rescission and bring the proper application before the appropriate magistrate. The magistrate has no alternative but to grant the rescission, as there is no argument about whether the judgement was or was not correctly granted. An individual will have their judgement rescinded and the credit bureau’s must amend their records so that all trace of the judgement is erased. This means that many people who were previously unable to obtain credit will now be able to do something about their credit status.
Logan warns that there are many illegal operators in the market of credit record restoration. They advertise in the press and often have posters on street poles. The fraudsters offer to restore the applicant’s credit record for an up-front fee and then fail to deliver. The only way to legally restore your credit record is to use a reputable attorney.
There is no doubt that being blacklisted can cause immense problems in terms of getting further credit, so it is vital that you keep your credit rating clean.
The credit bureau industry has come under pressure recently to clean up its act. They have not practised discretion in the past and black listed people for amounts as small as R25. Thousands of people only find out that they are blacklisted when they apply for credit. Now creditors are not allowed to be listed for amounts less than R500. Creditors have been known to forward adverse client information to the bureau’s without even contacting the client. When it comes to smaller amounts the client may not even know that the money is owed. An invoice could have been lost in the mail, been incorrectly addressed or they could have moved. A little homework on the part of the credit manager could have resulted in a paid bill.
If you call a credit bureau yourself they will give you free advice on ways to have a judgement rescinded or get your name cleared. They are also obliged by law to give you a free copy of your credit report once a year so you can check your status. If you are thinking about applying for credit soon it might be a good idea to call the bureaus before you apply. It is also vital to check your report regularly to prevent against identity fraud. Someone may be applying for credit using your good name.
For more financial advice, workshops and articles, go to Iona Minton's financial blog here.
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