By law, you cannot be banned while under debt review. If you were blacklisted before entering debt inquiry, it will be permanent on your record. This is only one of the numerous reasons why you should seek debt relief as soon as possible.
What is Blacklisted and Debt?
The phrase “blacklisted” is frequently used, yet it does not exist. Your credit history and payments are recorded on your credit record. If you miss payments and get behind, your credit report will suffer, and your score will suffer as a result.
Your credit record will be positively impacted if you make regular loan repayments. Your score will improve as a result of this. You see, you can’t truly be blacklisted; you can only have a low or high score. Your suppliers will look at your credit score to see if you can pay your bills on time. If you have a poor credit score, you are a high-risk consumer.
Debt review may be an alternative for you if you are having trouble paying off your bills and want to enhance your credit score. When you enter debt review, your debt counsellor will contact your creditors to negotiate a lower monthly repayment amount as well as lower interest rates, resulting in you paying less each month. Your debt counsellor will have devised a new repayment plan for you to follow, and you will just have to make one monthly reduced payment to your debt. Your debt adviser will have prepared a new budget for you as part of the process, so you will have enough money to pay off your debts and cover your living needs. Your creditors will be unable to take legal action against you, and you will be on your way to financial independence. Your credit report is repaired and all references to bad information are erased once the process is done.
What is the Difference Between Debt Review and Blacklisting?
Debt review is a legal process that helps over-indebted people become debt-free. The process was introduced by the National Credit Act (NCA) to prevent consumers from being blacklisted.
The difference between blacklisting and debt review is that blacklisting is an industry term that could cause implications with credit providers. Whereas debt review is a legal process put in place to help over-indebted.
Would you be Blacklisted if your Debt is under Review?
If you are blacklisted and decide to apply for debt review, your credit report is likely to be negatively impacted and may take several years to restore to normal. However, unlike being blacklisted, debt review will be excluded from your name once you have paid off all of your debts.
When you have paid off all of your debt, you will be issued a clearance certificate and your name will be removed from the debt review process. As soon as your name is removed from the debt review process, you can begin rebuilding your financial situation from the ground up. Your credit rating will be reset to zero.
So, no, you will not be blacklisted if your debt is being reviewed. Instead, debt review safeguards you against being blacklisted. But what exactly is the distinction between debt review and blacklisting? What impact do they have on your financial situation?
The Bottom Line:
While you are through a debt review, you will not be blacklisted, and the process will safeguard both you and your credit score. If you enrol in time, debt review can save you and your finances.
If you are under debt review, you will not be blacklisted. If your debt is being reviewed, creditors will interpret your decision as an attempt to improve your financial situation. Although your credit report will be blacklisted to avoid you from incurring additional debt, it will not be negatively affected. Once you’ve received your clearance certificate, you can reapply for credit and responsibly rebuild your financial situation.