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How to avoid being blacklisted by credit providers

How to avoid being blacklisted by credit providers

Despite what you might think, the word “blacklisting” actually isn’t used in the credit industry any more. This is because the credit bureaus now keep both the bad and good aspects of your credit history, whereas they used to only keep the negative information.

What “blacklisting” now refers to speaks more to the limited chances a person might have when applying – and getting accepted – to take out credit or loans. Credit providers look at your data and financial behaviour, in all aspects, when deciding to accept a credit application and if you have a bad credit report or a low credit score, you’re less likely to get a yes. 

How to avoid negative data on your credit report

There are a few ways to keep your credit score positive and your financial report healthy in order to have credit applications accepted. For example:

Make sure you make payments on time

Late payments when paying back credit and loans can have a bigger negative impact on your credit report than you might expect. Especially if you struggle to pay back the amount with the interest that accrues. To avoid late payments, only take out loans you know you can back on time and put an automatic order in place so you don’t have to think about it – or so that you don’t forget about it!

Limit how often you apply for new credit accounts

Each time you apply for a credit account, it can lead to a hard inquiry which can hurt your credit scores. This isn’t a big deal when there are only a few applications, but the inquiries can add up which has a compounding effect. The older an account is on your file, the better, so opening up too many new accounts can also have a negative effect on your credit score.

Get professional help

Entering into a professional service to resolve any debt can help protect against negative data on your credit report. Signing up for Debt Review also helps protect you against any repossession of property, creditors hounding you, and ensures that you find your financial feet and clear debt from your report.

How do I check my credit score?

While a person should have some idea if they are risking being “blacklisted”, there are some cases where they might not know that their credit score is low or that there is negative data on their credit report. It’s always better to stay informed rather than having a shock when applying for credit and there’s no harm in checking in on your credit score, so it’s advised that you keep tabs on the health of your finance if you aren’t sure.

In South Africa, residents have access to one free credit report per year. It’s fairly easy to check and can be done online. We recommend going to Clear Score to get insight into your credit score. It’s a free platform and provides accurate information about your credit rating.

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