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Johannesburg - Regulations to remove adverse credit information from a consumer's credit report does not eliminate debt, TransUnion re-iterated on Tuesday, saying there is widespread confusion about the latest credit amnesty.
"Many consumers believe – incorrectly – that the credit amnesty means they no longer have to repay debts incurred before April 1 2014, the date on which the credit amnesty became effective," the credit bureau said.
The credit amnesty is in no way a debt pardon and consumers are urged to continue servicing all their debt obligations. "Consumers still have to repay all their debts."
What goes, what stays
All the credit amnesty has done is to remove the "negative" information reflected on consumers’ credit reports before April 1. This includes:
* Negative classifications of consumer behaviour, including: "delinquent", "slow paying", "absconded", or "not contactable".
* Negative classifications of enforcement actions, including: "handed over for collection or recovery"; "repossessed", "revoked", any "legal action", or "write off" of the debt.
* ALL paid up civil court judgments where the consumer has settled the capital amount.
However, any negative classifications of consumer behaviour or enforcement actions that occurred after 1 April 2014, will still reflect on a consumer’s credit report in the future.
Consumers should take note that debt review information, sequestrations, rehabilitations and administration orders are not included within the credit amnesty and will not be removed.
Incentive to pay off debt
The credit amnesty also requires that from June 1 2014, all paid up judgments are to be removed from the credit bureau records on an on-going basis which gives consumers an incentive to pay off their debts.
Currently, judgments are removed after five years, or earlier if rescinded by a court.
From the 1 June 2014, when a consumer has paid up their debt and proof of payment has been provided from the credit/service provider, the judgment will be removed within seven days. The consumer will no longer need to go through a court process.
You should check your credit report now and after June 1 to ensure that you have benefited as you should from the credit amnesty.
You're entitled to one free credit report per year from each of the 13 credit bureaus, the major four being TransUnion, Experian, Compuscan and XDS.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
"Many consumers believe – incorrectly – that the credit amnesty means they no longer have to repay debts incurred before April 1 2014, the date on which the credit amnesty became effective," the credit bureau said.
The credit amnesty is in no way a debt pardon and consumers are urged to continue servicing all their debt obligations. "Consumers still have to repay all their debts."
What goes, what stays
All the credit amnesty has done is to remove the "negative" information reflected on consumers’ credit reports before April 1. This includes:
* Negative classifications of consumer behaviour, including: "delinquent", "slow paying", "absconded", or "not contactable".
* Negative classifications of enforcement actions, including: "handed over for collection or recovery"; "repossessed", "revoked", any "legal action", or "write off" of the debt.
* ALL paid up civil court judgments where the consumer has settled the capital amount.
However, any negative classifications of consumer behaviour or enforcement actions that occurred after 1 April 2014, will still reflect on a consumer’s credit report in the future.
Consumers should take note that debt review information, sequestrations, rehabilitations and administration orders are not included within the credit amnesty and will not be removed.
Incentive to pay off debt
The credit amnesty also requires that from June 1 2014, all paid up judgments are to be removed from the credit bureau records on an on-going basis which gives consumers an incentive to pay off their debts.
Currently, judgments are removed after five years, or earlier if rescinded by a court.
From the 1 June 2014, when a consumer has paid up their debt and proof of payment has been provided from the credit/service provider, the judgment will be removed within seven days. The consumer will no longer need to go through a court process.
You should check your credit report now and after June 1 to ensure that you have benefited as you should from the credit amnesty.
You're entitled to one free credit report per year from each of the 13 credit bureaus, the major four being TransUnion, Experian, Compuscan and XDS.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
