Hi, I was under debt review from 2015 until recently. I managed to pay off all my creditors, with the exception of my home loan. I was then declared no longer over-indebted by the Magistrate’s court and a Form 17.W was issued by the debt counselors to the credit bureaus and to my remaining creditor. My question is whether the status on the credit checks will remain as “under debt review” seeing as there has been no clearance certificate provided by the debt counselor, or will this be changed, despite the fact that there is no clearance certificate? In addition to the above how will all of this affect my credit worthiness in the future?
Thank you for getting in touch.
If you have brought arrears up to date and are able to pay original instalments, or if your debt has been settled, then you should have received a Clearance Certificate. So if that is indeed the case you need to contact your Debt Counsellor to find out why a Clearance Certificate has not yet been issued. You can also pull your credit record to see if there are any accounts still in arrears (you can pull your credit record for free once a year).
Once the Clearance Certificate is issued, the credit bureaus have 5 working days in which they must expunge from their records any information pertaining to the fact that you were subject to a debt review.
In theory, you should be able to apply for credit again within a week of receiving your Clearance Certificate. But the credit bureaus usually take longer than that to get your record cleared. We always suggest waiting at least 3 months before applying for new credit.
Pull your credit report about one month after you have been issued with the Clearance Certificate. Check your credit score and payment history. If there are any discrepancies, take it up with the credit bureau or your Debt Counsellor. I would suggest that you make sure your credit profile and credit score is good before applying for new credit. Keep in mind that every time you apply for credit and get declined, it affects your credit score negatively.
Also keep in mind that even though your credit score might be good, credit providers might still have a flag indicating your history on their internal systems. They must also remove those records. It always remains the decision of the credit provider whether or not they want to extend credit to you. If they do decline your credit application, you have a right to know exactly why they declined it.
Hope this information helps.