It has been 14 months since all my debt has been paid. Everything. And it felt so good.
However I thought after debt review, debt being paid, judgements removed etc. The creditors “fell away” overtime things would be better and I could finally start building a name, I was very wrong.
It has been over a year now my credit report from all the bureaus are pretty much empty, however NO ONE not even a R500.00 payday loan is being approved, I retrieve my credit report every month or so and my score is just declining.
I am not being granted credit; therefore I cannot build a name. The credit bureaus say I need to maintain a healthy mix of credit but no one will give me any.
I am worse off paying my debt and the longer I go without any credit the worse my score is getting. I don’t know what to do. I thought it would be a good thing to get everything sorted. It didn’t seem to work out for me.
Thank you for your question.
Firstly you need to make sure that there are no flags on your credit report that indicates you have been under debt review. When you settled all your debt, the flag had to be removed in order to restore your credit record.
Secondly, the credit providers MUST give you a proper explanation as to why they declined your credit application. It is your right to know.
If the reason is that you have no credit record, I would suggest that you start the way we all did, with a clothing account. This does not carry much weight with your credit score but is a start and is the most easily obtainable. What is very important though is that you plan how much credit you can afford and borrow accordingly. Don’t fall in the same trap as before. Taking out a personal loan and repaying on time every month is very good for your credit score.
For some reason, financial facilities such as credit cards, over drafts and personal loans help your credit score along more than a clothing account would. These are however the biggest culprits in making people over-indebted. Our advice: Start slowly, plan ahead and make sure that you only take on credit that you can afford and really need.
Have a great day