Everything you need to know about ‘Blacklisting’

We’ve all heard the term ‘blacklisted’ and we’ve been conditioned to fear it ever happening to us. But what does this term actually mean and does it still apply today?

In the past, to be ‘blacklisted’ meant that you had a record of non-payment of outstanding debt. In other words, it was a term used to describe people who were very high credit risks and therefore, not good people to lend money to. Blacklisting became popularised when credit bureaus only used negative information as a way to calculate risk and credit rating. Therefore, if someone was blacklisted, it meant that credit bureaus had analysed all of their negative data and determined that they were a high credit risk. Now, credit providers analyse both negative and positive data so as to more accurately predict consumers future behaviour. Blacklisting, although still widely referred to, no longer applies in the same ways. Bad credit doesn’t last forever and you can improve your credit rating with the help of professionals and good discipline.

That being said, Cyber Finance wants you to fully understand what it means if you’ve been deemed a high credit risk, and what you can and can’t do while you are working to improve your credit rating.

Can I buy a car or a house?

When you apply for any type of credit, your credit provider or bank will always consult your credit rating before granting you the loan. The same process applies for a home or car loan. If you’ve been deemed a high credit risk, you can still apply for a home loan, and possibly have it granted. It all depends on your credit history and whether credit bureaus take your whole history into account.

Will I be blacklisted if I’m under debt review?

Debt review, or debt counselling, is a process offered by the National Credit Regulator (NCR) to help consumers protect themselves from being ‘blacklisted’. In other words, people under debt review are trying to rectify their credit rating in the hope that by the end of their debt review process, their credit rating will be reset to zero. While under debt review you are legally protected by the NCR. Technically, you can’t be ‘blacklisted’ while in debt review, but if you are in debt review, your credit rating is at a critical point and you are most likely struggling to apply for credit from registered providers.

Can I clear my name?

The most important thing to remember about a bad credit rating is that it is not forever. If you work to rectify your credit score, you will be able to ‘clear your name’ and start over. The term ‘blacklisted’ no longer applies in terms of the law, and therefore won’t be a permanent blip next to your name. Debt counselling specialists, like Cyber Finance, are here to help you get your credit score back to zero, so that you can get your finances back on track.

Blacklisting, although no longer legally applicable, is still a widely used term. If you have been ‘blacklisted’, it’s important to remember that you can change your situation. Cyber Finance are a team of debt specialists who can help you figure out practical ways of managing your debt, so that you are able to make your payments and improve your credit score.

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