There is no doubt that going under debt review will seriously affect your credit profile and reduce your score with the various credit bureaus. It is a long road to repair your credit score after debt review but it can be done.
Legally you can not take on any new debt while still under review. Hopefully, you would not want to do that. If you have found yourself in this unfortunate situation, firstly take heart in the fact that you are not alone. Secondly, you are at least taking proactive measures to resolve and rectify the problem.
Stick to the terms of the debt review and if and when possible, pay more than the minimum required. The first goal obviously is to settle all the debt. The company assisting you with the process can supply you with letters to confirm each debt is paid-up, otherwise known as a clearance certificate. You must then ensure that they have your status changed with the National Credit Regulator to “no longer under debt review”.
The alternative is to work through the courts to rescind the debt review court order and get a new order stating that you are no longer under review. This can prove to be costly and time-consuming.
WANT TO FIX YOUR CREDIT SCORE?
Discover how you can get world-class legal assistance for as little as R49 to help you improve your credit status.
Once you are out of debt review, you can begin the process of rebuilding your credit profile and improving your score. You obviously want to avoid new credit as much as possible so start with monthly non-debt expenses that the bureaus will pick up such as insurance premiums, pay TV subscriptions and cell phone contracts.
You will find credit hard to come by but slowly you will be able to get a few small credit accounts and perhaps a credit card if your bank is willing to give you one. You then need to pay them perfectly for some time for your points to slowly increase as the good payment history becomes longer.
Your payment history will remain on your profile for two years, even after debt review. As a result of the reduced payments made while under debt review, this will not reflect positively on your profile and reduce your score. It will not look good at first but don’t despair. After about six months of good credit behaviour, your points will slowly start to rise.
Just take it one step at a time and follow good credit practices and over time, your score will improve. Just make sure you do not get into the same position again.