Can one be scored for credit when under debt review? I have been asked this question several times by some of our clients that are under debt review.
As per section 86 of the National Credit Act (NCA) No. 34 of 2005, an order for debt review given by the National Consumer Tribunal or the Court, the credit information must be retained by credit bureaus from the date of commencement of the event until a clearance certificate is issued.
This implies that credit scoring is not possible for people under debt review. Under normal circumstances there is a flag on a consumer’s profile that is under debt review. The flag will show any financial institution that the consumer is currently under going debt restructuring and scoring at that time is not applicable.
The fact that someone is under debt review also means that they are not supposed to receive any credit. Under the National Credit Act (NCA) Act No. 34 of 2005, applying for and accessing credit while under debt review is deemed to be reckless lending.
It is only after that debt is all paid up and a clearance certificate is issued and the debt review flag is removed can one start on a clean slate.
The consumer can then be able to start building their credit scores within couple of months.
I have had clients in the past who after we have issued them with the clearance certificate and removed them from the debt review databases with credit bureaus took them less than a month to be able to buy a motor vehicle on credit.
Contact Debt Sage now to see how we can help you live a debt free life