Blacklisted Loans

Personal Loans Loans for Blacklisted A loan is the usage of money or other property of value that is lent and is expected to be paid back, or returned, by the borrower over a certain period of time or on a set date. To be more precise, a loan is a debt that is taken on by individuals, companies, or other organizations that usually contain stipulations on how it is to be paid back. How a loan is repaid. How a loan is repaid depends on who is doing the lending and the relationship between the lender and the borrower. If it is money that is loaned, in most cases, it will be expected to be paid back in installments over a certain period of time. The installments can be set up as weekly, bi-weekly, monthly, quarterly, yearly, or for other periods. Loans are generally given at a cost to the borrower. Interest may be charged and collected as an incentive for the lender to extend the credit in the first place. Fair lending laws have been written and implemented to insure fairness to borrowers and lenders alike. Any time a loan is given, regardless of the amount, a contract should be written outlining the terms of the loan that include the amount of money borrowed, any interest added to the principal amount, if any, repayment responsibilities, and any restrictions or other obligations. Whether the loan is being given by an individual, bank, credit union, mortgage company, or other financial institution, it is the responsibility of the lender to provide the borrower with a contract for repayment of the loan. Types of loans There are many types of loans that are given for different reasons and under different circumstances. The best type of loan for you depends on your needs and your ability to repay it. A loan may be secured or unsecured. •A secured loan is one in which real or personal property is used as a pledge for repayment. Real property may be a home, commercial building, industrial building or complex, apartment building, vacant land, farm or ranch land, or other property. Personal property may be a car, jewelry, furniture, or other objects with value. •An unsecured loan is one that is given with a verbal or written agreement to repay with no property involved, real or personal. Pawn shops, payday loans, personal loans, 401k loans, and income tax refund loans. •Pawn shops: Money is loaned against jewelry, cameras, watches, guns, musical instruments, tool, household appliances, and other valuables. •Payday loans: Basically an advance of money on a future paycheck or other sources of income. •Personal loans: Loans that are given that usually does not require collateral such as personal or real property. •401k plans and certain stock options can be borrowed against. •Income tax refund loans are offered to people who want to get their refunds early. When you apply for a loan, the lender in the transaction normally expects the loan to be repaid and expects the payments to be made on time when they are due. It is up to the lender to do everything possible to protect his interests. A lender may require you to fill out a loan application, check your credit history, inquire about your assets, check employment history, and examine your other financial obligations.

Tips to improve your credit score Find out how to improve your credit record and increase your credit score. Three key credit must do: Paying your accounts and loans on time is crucial. The single most important way of improving your credit record is to pay your accounts on time. This is because the most important information, other than negative blacklistings, is the fact that you are (hopefully) now paying your accounts on time. Each month your payments get recorded in the Payment Profile section of your credit record and provided you have been paying your accounts on time for at least six months, or preferably a year, you stand a far better chance of being granted credit, and improve your credit record. Paying unpaid accounts (but be careful when doing so) If you have `forgotten` to pay some old accounts that are less than three years old you should pay them and have the accounts reflect as paid, unless they no longer appear on your credit record. It is also no use paying an old account in the naive hope that the negative listing will be automatically removed. Unfortunately the law does not force creditors to remove these negative blacklistings once the account has been paid. It is important that you obtain written confirmation from the creditor, before you pay the account, that they will remove the Adverse Information and not simply amend it. If they will not remove it make sure they, at least, agree to amend the listing to reflect the account was paid. Having court judgments removed is critical Unlike an Adverse Information listing which can be removed or at least amended, a court judgment can only be removed before the 5 year data retention period (see below) if the court that actually granted the judgment orders that it be "rescinded". Judgments are very negative and should not be ignored, they are given a higher weighting than other negative listings because a magistrate or judge has held you liable. It is therefore really important to have any judgment rescinded as this will greatly improve your credit score. In rare cases you may still get credit despite a judgment reflecting on your credit record but you will be playing into the credit providers hands as they will feel justified in imposing a higher interest rate. Why pay an attorney to get a judgment rescinded? It is not a simple thing to have a judgment rescinded. It involves obtaining the original court papers, having the application typed up and correctly served, setting the application down for hearing, appearing in court and answering any objections, obtaining and processing the court order. That may not seem like much but the "devil is in the detail". While many people think of themselves as lawyers they often find their inadequate knowledge of the law results in long delays, frustration and embarrasment. The famous American President Abraham Lincoln said "He who represents himself has a fool for a client." It makes sense to have an attorney assist you as rescinding a judgment requires a court application. What does it cost to have a judgment removed? But how expensive is it? Law firms usually charge by the hour but we charge a fixed amount, usually R1900 incl VAT, to have the judgment or blacklisting rescinded and removed. It really isn't a lot considering the amount of work involved. Given the far larger saving you will make by qualifying for a lower rate of interest, it makes sense to have a reliable lawyer, who specialises in this field, assist you. To find out what our clients have written about us click here. Yes, there are many other aspects to getting credit cheaply (and you should read more about them below) but if you want credit or are being asked to pay a fortune for it, you should consult a specialist consumer attorney and sort the problems out efficiently before you get taken to the cleaners. What else should you do before applying for a loan Aside from the three key issues explained above it is essential that you also take other action as part of your strategy to save on interest. First, by law you are only entitled to the credit that you can afford. That means that should you have an existing credit facility that you do not use, such as an Edgars store card, this should be closed as the credit provider must take this facility into account when determining whether you can afford further credit. In other words, close those accounts you do not use. Second, some types of credit such as credit cards or personal loans are revolving, in other words the account gets paid but quickly goes back into credit. In their nature these accounts reflect poorly on you as they imply that you are in regular need of credit. If possible, you should close these types of accounts. Third, try to avoid debt spiral behaviour. In other words, do not borrow to pay your instalments on other credit facilities. Likewise, you should try to pay more than the minimum instalment amount on each credit facility as this indicates that you have disposable income. Lastly, avoid expensive debt, such as short term (30 day) loans. Fourth, whenever you apply for credit an "enquiry" is added to your credit record. This is fine if it is done seldom, but if you make several enquiries for credit you will seem desperate and this will also reflect the possibility that you have already been declined credit. It is therefore best to rather clear your credit record of negative information and then apply to as many creditors as possible on the same day. That way they are unlikely to pick up the enquiries immediately as the enquiry data usually takes a couple of days to reflect on your credit record. Fifth, if you apply for credit when you have "maxed out" all your credit facilities you will also run the risk of the application being declined or the interest rate being "loaded" (made higher), so ideally, try to apply for credit when you have paid down your existing credit facilities. Sixth, the fewer different credit facilities you have the better. You do not need to consolidate all your credit but you should aim to reduce your "lines" of credit, as the fewer you have the better. Seventh, if you are applying for credit with your spouse (or even someone else standing as surety/security), you should also ensure they have fixed their credit record and gone through all of the above tips and done their best to add to the good impression you are trying to create. Those are the keys tips to ensuring you get credit and get it as cheaply as possible. What Does It Mean to be "Blacklisted" The term blacklisted is the colloquial term used to describe people or companies who have a bad credit profile, otherwise known as a credit record. While everyone understands the term `blacklisted` there is actually no `blacklist`. Are you blacklisted? It’s easy to find out, all you need do is get your credit record, from South Africa’s two largest consumer credit bureaus, TransUnion Credit Bureau (Pty) Ltd and Experian Ltd. You need to get your credit record from both of these credit bureaus as they have different business subscribers and usually have different, but overlapping, credit data for every user of credit. Blacklisted: the full picture To illustrate, you may find that an adverse listing such as a "Bad payer" or "Slow Payer" default by e.g. Appliance City only appears on your Experian credit record and a magistrates court judgement by e.g. Standard Bank only appears on your TransUnion credit record. So, to be on the safe side, get your credit record from both credit bureaus, either by applying directly to each credit bureau in turn Why is at an issue being blacklisted? Being blacklisted is horrible. It is extremely difficult to get any kind of finance if you have a poor credit record. Even when you get finance the rate of interest charged is usually far higher than it would otherwise be. Basically your financial reputation is negatively affected by any adverse listings and unless they are removed you are treated like a financial leper. Types of negative blacklistings The type of listings on your credit record are broken down into four major categories: Payment Profile; Adverse Information (previously called Defaults); Judgments; and Notices. These listings are also generally known as negative or adverse listings and, depending on the type of listing, you will either not qualify for credit at all (where for example you have a Notice on your credit record) or have to pay much more (by way of interest, an upfront deposit, increased security or loaded settlement terms). So, it is best to try to have as many of these adverse listings removed as possible. So how bad is each listing type? The worst listings are without doubt Notices. If you have been placed under debt counselling or administration or been sequestrated you will not get credit, full stop. You can apply to court to have the situation corrected. Unless any Notice is removed you cannot get credit because the credit provider is acting illegally in lending you money. Judgments are the next most serious type of listing. They are highly likely to stop you getting credit. In rare cases you may still get credit despite having had a judgment granted against you. You will just pay far more for it. Much depends on the amount of the judgment, how long ago judgment was granted, what other listings you have and whether your payments over the last two years have been on time or were frequently missed or delayed. Fortunately getting a judgment removed is relatively easy - you still need to go to court but the process is less complicated. Adverse Information can stop you getting credit but in most cases it will impact the cost of credit more than your ability to get credit. Again, much depends on whether it was a recent listing and whether the account remains unpaid. Generally this type of listing can be removed on instruction by the creditor (but often the creditor will refuse to do so unless they receive a detailed motivation). At the very least it is important to have the listing amended to reflect that the account was paid. Payment Profile information changes monthly as the payments made or alternatively missed during that month get noted on your credit record. The most recent data gets added while the oldest data gets deleted. It is far less serious than the other types of listing but like the other types of listing, if you have a very poor payment profile during the last six to twelve months you will either not get credit or find the cost of credit far higher. Data Retention Periods What most consumers and/or debtors are unaware of is that all types of credit data are subject to strict maximum data retention periods. These data retention periods are as follows: Notice of Sequestration - 10 years Notice of Rehabilitation - 5 years Notice of Debt Counselling (after termination of Debt Counselling) - removed immediately Notice of Administration (after lapsing or rescission) - removed immediately Notice of Administration (if current, i.e. not lapsed or rescinded) - 10 years Civil court judgments (High Court or Magistrates Court) - 5 years Adverse Information - 1 or 2 years (depending on type) Enquiries by Credit Providers or Subscribers - 2 years Removing blacklisted data before the data retention period expires Yes, these listings stay on for what seems an eternity and sometimes it is impossible to wait for these listings to fall off. It is possible to have most of these listings removed before the data retention period expires. For starters, court judgments can be rescinded by the court that granted the judgment. Once rescinded, the credit bureaus must remove the judgment listing, this is because the court has made the judgment void. Adverse Information can also be removed on instruction by the creditor. While members of the Credit Providers Association will only remove the adverse information in limited circumstances, most other creditors will do so following payment of the account. Administration, Debt Counselling and Sequestration notices can also be removed following application to court. Who can help me fix my credit record? Credit repair is the general term used to describe the removal of negative listings from your credit record. While many companies advertise that they are able to remove negative listings, they often promise more than they can deliver. It is also important to remember that in terms of South African law (Notice 169 issued under the Harmful Business Practices Act), you should only pay an attorney upfront to help you in this regard. Credit repair agencies other than practising attorneys are not permitted to collect an upfront fee, because they often fail to perform the advertised credit repair services. It is always better to approach a registered firm of attorneys, which charges a fixed fee to rescind court judgements or negotiate the amendment or removal of Adverse Information. Beware of paying upfront fees to problematic credit repair agencies such as Credit Clear or Credit Fix - not only do you stand to lose your money without anything being done, but you will have acted as an accessory in helping the credit repair agency break the law. Why is credit repair discouraged by Banks and other credit providers? When a Bank can charge you more interest because you have a poor credit record it will have an easy excuse to do so. It is obviously not in their best interests to help you qualify to pay less. That is the main reason why they discourage you taking action to improve your credit record. In addition, when a Bank or any other credit provider adds a negative listing to your credit record they limit your ability to get credit elsewhere - this allows them to hold you hostage so that you have to take up their credit facilities rather than one of their competitors. Standard Bank, Capitec and some other creditors go so far as to withhold consent to the rescission of a judgment - to make it harder to have the judgment rescinded. While Banks and credit providers often play down the importance of credit repair, everyone in the credit granting industry knows that it is essential to have a good credit record if you are to qualify for credit or get it cheaply. Correcting false information on your credit record If, on the other hand, you never had an account with the creditor that blacklisted you, or were listed after you settled your account, report the matter to the Credit Information Ombud. The Credit Information Ombud will only investigate the matter after you have lodged a complaint and obtained a reference number with the relevant credit bureau(s) and waited 30 (thirty) days for them to respond, but it is a free service and provided the listing was made in error, it will be removed. It is important to understand that the Credit Information Ombud is appointed by Credit Providers and does not assist consumers to remove negative information from their credit record - he simply facilitates the correction of credit data. Blacklisted Check Know whether you are Blacklisted or not. Blacklisted? You can do an ITC blacklisted check and check your credit records to find out if you may be blacklisted for unpaid debts.  Keeping abreast of your credit status will give you peace of mind when you next apply for credit. Checking and knowing whether you are blacklisted is important and consumers and should be done at least once a year. Consumers are entitled to one free credit report a year according to the National Credit Act. You should check your credit record at the credit bureau, especially when you have been refused credit or told you that you have a bad record or are blacklisted. Many blacklisted people feel embarrassed when they apply for a loan with a lender only to find out they have a blacklisting against their name due to previously un-paid debts. Transunion ITC will do a blacklisted check for you. In any case, no matter who you go to when you need a loan from a financial institute they will always run a blacklisted check to see if you are a high risk to lend money to. The best you can do is to run a blacklisted check on your name to know your credit score and rating before you approach a lender. You can apply for a loan without knowing your score, but it is always best to be prepared and to do a blacklisted check to know your credit rating before you fill out any applications to get finance. If you have done a blacklisted check and discovered that you are indeed blacklisted, there is help. A professional counsellor will guide you with the utmost of integrity and understanding of your situation, to a successful and satisfactory way to clear your debt and work out a plan that will help pay your debt back, clear your name, and get all your blacklisted data removed.