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Credit rating is like a friendship - expert

A Fin24 user is frustrated because he cannot get any credit at financial institutions despite having come out of debt counselling. He writes:

I previously went under voluntarily debt counselling and voluntarily removed it when my salary increased.

I once attempted to purchase a property with FNB and I was told they will never do business with me for three years after I was removed from debt review.

My account with Capitec Bank was handed over and it is now paid up. However, Capitec told me they will never do business with me again. The same happened with Bayport Financial services.

My profile with different credit bureaus have been updated. Does this mean that credit providers keep a negative record internally and use it to "blacklist" those who had difficulties while they were their debtors?

It seems to me that I will never receive credit again from anyone.

Do I have any legal recourse for this?

READ: Debt counselling fees shock

Tommy Nel, head of credit at FNB home loans responds:

FNB is, by law, not able to extend any further credit to customers that are under Debt counselling.

We do not have a formal rule or policy that states that we will not lend to a customer for a certain period after coming out of the debt counselling process.

However, the credit behaviour of such clients leading up to them applying for debt counselling, if they have fallen into arrears or defaulted on some of their commitments, will mean that the bank would not consider them for further credit as they would generally not pass the banks' credit scorecards as a result of their past credit behaviour.

READ: Debt and dementia

Charl Nel, head: communications at Capitec, responds:

If a client who was under debt review has been granted a clearance certificate (Form 1), the debt review status of the client will be removed - subject to balance and other checks by Capitec Collection Services.

This will enable a credit assessment override by the Credit Assessment Team (CAT) and the client may then be granted a loan term based on the outcome of a new credit assessment, which looks at the client’s current risk profile.

However, if a client was handed over by Capitec Bank and the client’s loan has been paid up in full, Capitec Bank will only on an exception basis remove the handover status. The removal of the handover status is subject to internal conditions that must be met.

The long and the short is that consumers should protect their credit rating continuously in order to make use of credit to better their lives.

Your credit rating is the same as a friendship – if you do not invest in the friendship by doing what you agree to do or arriving for a meeting you have accepted, then the friendship one day falters and you become strangers to one another.

ALSO READ: Debt counselling vs own arrangements with creditors

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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