If you are blacklisted, this is not the end of the world. It is perfectly possible for you to improve your credit record. You just need to know what process to follow. Here you will find the details. You will get information and advice on accessing your credit rating and keeping it in good condition. You will also find an overview of the financial options which are available to you.
When you have a low credit rating, you have much lower chances of obtaining personal finance or a home loan. At the same time, consumers are tempted to borrow money due to the widely available and widely advertised credit products. As a result, they spend more than they can afford and very often use credit which they actually do not need.
It has been estimated that the people in South Africa use 76% of their net income for repaying debt. Then they spend what is left on food, fuel and the tuition fees of their children. The limited spending is not the only issue. People actually have very little, if any, money to save. Due to this, they have to use finance from lenders in order to make major purchases such as a car. While the use of credit is something natural and common in the modern world, it is certainly not normal for a person to be in debt for the rest of his/her life. Find out how to get out of debt and improve your credit rating.
Credit Record Access
There are two major credit bureaus in South Africa - TransUnion and Experian. They are required to provide one free credit report to each person with a credit record every year. In order to obtain your free report, you need to send the respective bureau an email with the copy of your ID. You will be contacted to go through a security check. Once your identity is confirmed, the report will be provided to you. If you need to request another report, the procedure is the same, but you will have to pay a fee. The fee is lower than R100.
Credit Record Maintenance & Improvement
You should do your best to pay all your bills at least a few days before the due date. This is because banks sometimes need more time to process the payment and the bill may be regarded as unpaid. You can keep a schedule for paying bills to make things easier and to avoid getting into trouble.
You should stay away from new loans, credit cards and other forms of credit. You should avoid even contracts for cell phones. Any such move can have a negative impact on your credit rating.
You should close all bank accounts that you are not using. When you have an open line of credit, this works to lower your rating, even if you are not actually using it. Similarly, you should not open an account in your name for someone else to use. This may cause issues which you may be unable to fix.
When you repay a loan or a credit card, you should get a settlement letter from the lender. That way, you will have proof to show to the credit bureau in case the repayment has not been taken into account.
The personal details on your credit record should always be up to date. Make sure that you change them timely, especially if you move to a new address or change your job.
Home Loans for Blacklisted
It is possible for a blacklisted person to obtain a home loan. Perhaps the most effective strategy is to use the professional services of an attorney who specialises in blacklisting cases. If you have repaid your debt, then the listing may be removed automatically. On the other hand, if you have not taken any action to repay the debt, your chances of getting a home loan will be minimal.
Another strategy which you can use is to place a large deposit, preferably over a third of the value of the property. This lowers the risk for the lender and boosts your chances of obtaining finance. You have to provide a satisfactory explanation of why you have been blacklisted as well.
You should definitely meet the loan officer in person to discuss your situation. With a letter of recommendation from your employer, you will achieve greater credibility despite the fact that you are blacklisted.
The Rent-to-Purchase Strategy
With this strategy, you have time to improve your credit record and to quality for a home loan at a later date. At the same time, you have to make a commitment. The property owner will ask for an upfront fee which will be used as compensation in case you do not purchase the house. If you use this strategy, you have to be certain that you will be able to buy the property before the set date for this.
Using a Personal Loan to Get a Home Loan
It is possible to take out one or more personal loans to pay a bond. However, this option is available only from loan sharks and it will most certainly get you into even more debt. You will have to make high payments and this will leave you with very little extra money to save. You should definitely avoid this option and go for a conventional strategy even if you have to wait for a while and rent a property.