How to Fix Your Credit Record

47% of South Africans are behind on their bill payments. Falling behind on payments not only leads to a bad credit record which can negatively affect future car loans and bond applications negatively but may also lead to sleepless nights and tonnes of anxiety. We’re here to tell you that you can get out of this in one piece.

Pay on Time

Even paying a day late will affect your rating at the Credit Bureau. Pay at least the minimum installment on whatever bills you have outstanding before or on the day it is due. Take note of transfer times between banks. For instance if you bank with ABC and the creditor is with LMNOP, you should give at least 48 hours in transfer time – given that you pay via internet banking. Also, keep in mind that if you make a payment late on a Friday then it will only reflect on the following Monday.

Settle Debt ASAP

If you have fallen behind on payments then that will be recorded at the bureau. This can reflect on your record for up to 36 months. Don’t let this startle you. What we recommend is that you start paying off those bills quickly as this will counter the negative weight on your record. As soon as you’ve settled the debt request, the institution sends a letter of consolidation to the Credit Bureau. Also, ask for a settlement amount if you want to pay the debt off in full – often you will be offered a discount.

Steer Clear of Credit Repair Agencies

Let’s face it. When we struggle to pay our bills we’re pinching our pockets already. Paying someone to regulate your cash-to-debt ratio is not a feasible option. A lot of scammers tend to target people who are already down, and often the fees these agencies ask can easily shoot up to 10s of thousands of Rands. Tread lightly.

Don’t Make Debt to pay Debt

Just because you see no way out doesn’t mean you need to go and take out a bond on your house to offset your credit card debt. Keep in mind that every time you apply or take out a new loan or purchase something on credit, it shows up on your report. The trick here is to think like a creditor – steer clear of the shops at all cost.

Don’t Wait for Creditors to Contact You

This point is vital. If you can’t honour a payment the best would be to phone the credit provider and tell them. Ignoring a creditor and not answering your phone when they call has an impact on your record. Make sure you phone them first and let them know what you can and can not afford to pay. Keep all reference numbers, emails, faxes and other correspondence on record. Always make sure that you ask for all confirmations in writing. Last one here, when it comes to banking details, make sure that you ask them to send you a copy of their details – never accept account numbers over the phone.

Credit Cards and Medical Bills

When it comes to the bills that do the most damage to your record: it’d be overdue credit card and medical bills. These two alone can tarnish a good standing record in no time. Be sure to make payment on these as soon as possible – and never dip below the minimum installment.


By Shawn Greyling

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