Unless you’re okay sharing a home with your parents until the end of time (or staying in your first flat/starter house), you’re probably going to want to either apply to rent or buy a home at some stage.

Inevitably, the person or company facilitating your application will perform a credit check. If you’re blacklisted, what will this mean for you?

Either you’re rejected for credit because the credit check pulled up a ghost from your carefree spending past… Or, you know what you did and finally get one of the free reports to be certain (or to see just how bad the damage is).

There is no escaping a bad credit history. Well, technically there is, but it involves a five-year wait and ‘ain’t nobody got time for that’. To clarify, every credit provider you’ve transacted with has been making notations about your payment behaviour, good or bad, with the various credit bureaus.

The three main types of notation (that you don’t  want) are:

• Arrears – when you are late with a payment
• Default – when you are really late with a payment (think six months late)
• Judgement – legal action has been taken against you in the High Court.

These listings have a negative effect on your credit rating, but if you have a default or judgement, credit providers start closing their doors. That is, nobody wants to take a risk on you and give you any credit.

You can see how this applies to applying for a bond, but renting doesn’t require credit, right? No, but they do require credit checks. Estate agents will run a credit check as part of your application to enter into a rental agreement. If you have been blacklisted, it will prevent them from letting to you.

Most property sites’ rental listings explicitly discourage those who have been blacklisted from applying. There is the chances that you find an agent or landlord who’ll let you plead your cause (if the blacklisting took place a while ago, or your circumstances have changed), but anyone who’s been letting long enough will not.

Your credit history is your written proof of how likely you are to pay on time. If you’ve got a notation that says you haven’t paid before, how likely will someone looking at that be willing to give you the chance to not pay them?

This also applies to applying for a school for your children, getting insurance, and applying for a job at a financial institution.

Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, reports that their estate agents refer a lot of potential buyers to attorneys if they have a blacklisting against their name that’s preventing them from securing a bond.

Goslett says it is possible for the buyer to rectify the situation and clear their name so that they don’t lose the property to another buyer. But it will depend on the blacklisting against their name.

According to Goslett, removing a blacklisting can be an “arduous, drawn-out process” but it differs from case to case and is largely dependent on the circumstances. “How long the process will take to rectify will depend on the parties involved, type of blacklisting, and possibly the courts in the case of a judgment,” he adds.

A default or other adverse listing will remain on someone’s credit record for two years (in some cases up to five years). But if the debt has been settled, the creditor can request that the credit bureaus amend the listing to ‘paid in full’.

A judgment, however, involves a court order compelling the defaulting party to pay the outstanding debt. Any debt that exceeds R100 000 will fall under the jurisdiction of the High Court (under R100 000 will fall under the Magistrate’s Court). If not settled, the judgment will remain on the credit profile for five years before it is automatically removed.

The New Credit Regulations stipulates that the debt must first be settled for the judgment to be removed from a credit profile before the five-year period has lapsed. Once settled, an attorney can then apply to have the judgment rescinded.

Goslett’s last bit of advice: keeping a clean credit record is less costly and time-consuming than dealing with adverse credit information.

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