Step-by-step guide to repairing your credit history

399294_10150922313064685_73394637_nThe DIY Credit Repair Toolkit is a must have for anyone who wants to take control of their debts

If you have taken on too much debt and are struggling to manage it; have had legal action against you or even if you are just thinking about taking on credit for the first time, you should read the DIY Credit Repair ToolkitTM published by the South African Law Centre. The Toolkit helps you to successfully repair your own credit record by providing you with clear and simple guidelines on how to fix it at no cost other than your time.

DIY Credit Repair Toolkit TM is the first in the DIY Law Series and provides guidelines and detailed information on what to consider before you take credit, what your rights and responsibilities are as an existing credit customer and how to mend a poor credit record.

What to consider before you take credit

Before you sign a credit agreement you need to make sure that you understand the terms of your contract and that you can afford your monthly instalments. According to attorney Nicky Campbell, the author of the DIY Credit Repair ToolkitTM, your monthly instalments should not exceed 30 per cent of your monthly income.

Campbell says as an adult South African, you have a right to apply for credit. You need to be aware that a credit provider has the right to decline your application but you have the right to the reasons why your credit application was declined. The credit provider is not however obliged to give you copies of your credit report.

Apart from a lack of affordability, a credit provider is likely to turn down an application if there is a negative listing on your credit profile, also known as “blacklisting”.  Campbell says it is advisable that you check your credit profile even if you’ve never taken credit as you may discover that you are listed on the credit bureau for an unpaid debt. This could be a result of a small amount that was unpaid such a student loan or maybe you lost your ID book in the past and someone may have used it to acquire credit.  The Toolkit gives advice on how to remove negative information from the bureau if it has been lodged incorrectly.

What to do when your debt becomes overwhelming

Campbell’s main advice if you are drowning in debt it not to ignore but to negotiate a payment arrangement with your creditors.

Campbell says if you ignore the problem and fail to make some payment, the credit provider can take legal action against you and this becomes increasingly complicated and expensive. The Toolkit provides a guideline on what to do if you have fallen behind on payments for your home or car as well as how to negotiate with your creditors and what your responsibilities are.

If the legal action has already been taken against you, you need to scrutinise information listed on your credit record and see that you agree with it. The first step is to consider if you are legally obliged to pay the account. Campbell provides a checklist in terms of determining whether you are legally obliged to pay the debt and what to do if you cannot afford to meet your debt obligations.

Campbell gives a clear and concise list of rules a creditor has to follow before taking action against you. For example a credit provider that intends to submit details of your default on any account to the credit bureaux must give you at least twenty business days’ notice in writing notification of their intention to do so, this is according to Section 72 (1) read with Regulation 19 of the National Credit Act. If you have not received any written notification on any listing, you can demand that the listing be removed from your credit profile. If you have followed all the necessary procedures to have a listing removed and you are still not satisfied with the outcome, you can refer your complaint to the National Credit Regulator. For further assistance you can contact the South African law Centre on the numbers below.

Before taking legal action the credit provider must send you an account of statement amount which must be delivered to you within five business days orally or in person, by telephone or in writing; either to the consumer in person or by sms, mail, fax or other form of electronic communication. This statement of amount must be delivered to you at no cost. If the credit provider fails to follow this procedure and yet enforces legal action against you, you can contact the National Consumer Tribunal in order to compel the credit provider to send you this statement of account.

When legal action has been taken

If you are already blacklisted and legal action has been taken against you, the DIY Credit Repair Toolkit will help you understand your rights and obligations such as how to deal with the sheriff of the court, when you don’t have to repay the debt and how to apply to have your judgement rescinded.

Campbell gives a step by step process on how to remove a magistrate court judgement listing without using a lawyer including where to submit a rescission application and how to find your case number.

For example Campbell writes that you need to first ensure that you have paid up your debts as well your administration fees; you can then apply to the court that granted the administration order to have the administration order set aside.

Your rights as a consumer

The National Consumer Act clearly states your rights as a consumer and responsibilities regarding the credit agreements that you agree on. The Act states that the debt collector must be registered with the National Debtors Council to be able to conduct debt collection. The credit provider must have given you a written notice of your unpaid amount. If this process has not been followed, the debt collector is acting illegally. A debt collector is a law firm that acts on behalf of your creditor.

The Toolkit has a list of contact details for various bodies that are able to assist consumers in dealing with creditors.

Order the book through the SA Law Centre or tel:  011 367 0695

The book costs R175.00, (including R25.00 postage) or you can receive an electronic version by email for R150.00

This article first appeared in City Press.

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