Do you know exactly how being blacklisted affects you?
The term, ‘blacklisted’ can be pretty misleading, in that it implies you have been added to some sort of naughty list when, in fact, there is no dark, ominous ‘Black List’.
The truth is all credit users have a credit profile, whereby the credit bureaus track your credit activities. In this way, the credit bureaus collect both positive and negative information on you – clocking up your credit score, depending on whether or not you stick to your credit obligations under the agreement you entered into with your credit provider.
Simply put, you skip a repayment – they record it, you pay an instalment – they record that too. So, if you decide to apply for some more credit, you will essentially be serving up all of the juicy scoop that the credit bureaus list under your name, on a silver platter, to your credit providers.
The truth about how being blacklisted affects you
Credit applications invariably involve giving your credit providers permission to delve into your shady financial past, which may or may not end up in them giving you the stink eye, before telling you not to let the door hit you on the way out. Well, not literally, but you catch the drift.
The vague and blurry thing about the word ‘blacklisted is that it lumps everyone into the same ‘time-out’ corner, even though there are various levels of being credit impaired. What people don’t seem to understand is that credit providers will obviously factor in the frequency, severity and how promptly you rectify your slip-ups.
Say, you’ve fallen into arrears for a period of less than two months, only to very punctually start paying back extra during the months thereafter – if you apply for credit at a later stage, credit providers are more likely to cut you some slack, seeing as you were nice enough to correct the situation and change your ways so quickly.
How being blacklisted affects you financially and professionally
If you’ve let things go pear-shaped for more than three months and have yet to pay off your debts, you will be ‘blacklisted’ in a stronger sense of the word and given your marching orders by the credit providers.
Similarly, being blacklisted is seriously not cool when applying for a job, as some employers conduct credit checks on their prospective employees, viewing your credit history as an indication of your reliability and moral fiber – and what have you.
To state the obvious, prevention is the best cure. But, for the already credit impaired or blacklisted, we’ll throw you a pearl – the more you delay in redressing the situation, the worse your chances are of having a bright and sparkly credit record one day, which is a great thing to have– I’m sure you’d agree.