I have settled all my accounts two of which had defaults. Among the 6 accounts I settled, I can’t settle two which have been prescribed. Will that negatively affect my credit score and should I apply for vehicle finance? And if it gets declined can I use my paid up letters to help get finance?
Thank you for your question.
Regarding Prescribed Debt:
Debt has only prescribed if there has been no attempt by the credit provider to collect it or if no summons has been issued for the debt during the last 3 years. Also, if there has been no acknowledgement of debt during the last 3 years. If you have made any form of payment in the last 3 years it constitutes an acknowledgement of debt.
Prescription of debt is a defence; thus, when the credit provider attempts to collect you can claim prescription as a defence. If the debt does not affect your credit record at this stage you can simply ignore it and if anything happens in the future claim prescription as defence. If it is causing issues for you, I would advise that you get an attorney to write a letter on your behalf to the respective credit providers notifying them of the problems that is being caused by the debt and then claiming that it has prescribed. If the debt has indeed prescribed already, the new Credit Amendment Act prohibits the prescription to be interrupted after 3 years. If it has not prescribed yet, then you need to be careful not to acknowledge it.
Regarding your Vehicle Finance:
First, check your credit record before applying for new credit. You can check your credit record with any credit bureau. TransUnion is the best, so we would suggest pulling your record there. By law, you are allowed to pull your credit record for free once a year. Here is a link to TransUnion’s site.
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, so it would be advisable to check your score with all of them.
Have a great day.