Can you be blacklisted while under debt review?
When you are under debt review you, you won't be blacklisted. In fact, blacklisted is a terminology that doesn’t really exist. When you go under debt review, there is a flag that gets placed on your credit report. This is just to let creditors know that you temporarily can't access further credit. This has often been cited as one of the disadvantages of the debt review process. But, it's important to note two things:
- Once you've successfully completed the debt review process, this flag gets removed, so you will be able to access credit again.
- This temporary lack of access to credit is the only true way of really getting out debt. You can't create more debt if you're serious about getting out of it.
Blacklisted?
Many people tend to use the term “blacklisted”, but this doesn’t exist. Your credit record is a record of your credit history and payments. If you miss payments and fall into arrears, your credit report will be negatively impacted and the score will lower as a result. This is what 'blacklisting' can refer to—negative information on your credit report.
If you make regular repayments to your debt, then your credit report is positively impacted. This will improve your score and it will increase. You see, you can’t really be blacklisted; your score can just be low or high. Your creditors will look at your score to determine whether you are reliable at paying your debts. If your credit score is low, this means you are a high-risk borrower.
Debt review
If you are struggling to pay off your debts and want to improve your credit score, debt review may be the option for you. When you enter under debt review, your debt counsellor will contact your creditors and negotiate a reduction in your monthly repayments as well as the interest rates which results in you paying less each month.
Your debt counsellor will have created a new repayment plan to follow and You will only have to make one reduced payment towards your debt each month. You will have enough money to pay off your debts and for living expenses as your debt counsellor will have created a new budget for you as part of the process.
Your creditors will no longer be able to initiate any legal action against you and you will now be on your way to financial freedom. Once the process has been completed, your credit record is repaired and any reference to negative info is removed
If you are in debt and struggling to make your repayments, contact us today for help!
The bottom line
You cannot be blacklisted while under debt review, the process can protect you and your credit score. Debt review can save you and your finances if you join in time.
