I lost my job due to retrenchment in December 2013; during that time I had 3 accounts to pay (Bradlows, Absa Credit Card and MTN Contract).
I managed to settle the Bradlows account and I was managing to pay the credit card and MTN contract for about 6 months after losing my job, but after August 2014 I couldn’t anymore.
Yesterday I received a call from Absa in regards to my unpaid debt, fortunately I got a new job which I started on the 4th of May 2015 and I will be able to pay them starting on the 1st of June 2015.
Today for some reason I checked my credit report and realized that I have defaults on my MTN account which I haven’t paid since last August 2014.
My question is; can defaults be removed when I pay them off on month end because I got a new job? The reason I could not pay was because I got retrenched from my previous job but now I found new employment.
Another question is how long do creditors take to place a default against someone? Any feedback or advice will be appreciated.
Thank you for the question.
The latest amendments to the National Credit Act include changes to the retention periods of credit information. Credit bureaus will now have to remove adverse information and judgement listings from a consumer’s credit profile, if the amount owed has been settled.
Consumers no longer need to have their judgement rescinded to get it removed from their credit profile. Furthermore, the retention period for default listings has now been reduced to 12 months. In the same way, retention periods concerning administration and sequestration orders have been reduced to 5 years.
If you have reached your retention period and the information is still listed I would suggest you firstly dispute your credit listing with TransUnion. Here is a link to TransUnion’s page explaining the dispute process: http://bit.ly/1bhiC8F
If you have a complaint about a specific credit provider you can lodge a complaint with the Credit Ombud. Here is a link to their page explaining the complaint procedure: http://bit.ly/1MMS9NI
Also keep in mind that there are 4 major credit bureaus. TransUnion, Experian, XDS and Compuscan. It can be that some of these other credit bureaus have not yet updated your profile. TransUnion is the best of the lot and some of the other is really slow in updating their systems.
A Default Listing is kept for 12 months or until the debt has been fully settled. The payment history is where the trouble comes in. A payment history of 24 months is kept, and if there has been a late payment or default on your payment history in the last 6 months or so it will affect your credit rating.
Hope this information was helpful.