Clearing Your Name After Debt Counselling in South Africa

Here’s how it works:

• Your debt counsellor should send your clearance certificate directly to the credit bureaus.
• The credit bureaus are responsible for removing the debt review flag; they have up to 21 working days to do so.
• At the same time, your status is updated on the NCR Debt Help System to reflect the clearance.

Important Note: The flag will only be removed if all accounts included in debt review are paid up in full. If any accounts remain unpaid, the flag will remain in place until the issue is resolved. This excludes home loan agreements.

It’s also worth noting that debt consolidation can help improve your credit profile, not harm it. Here’s how:

1. It makes your monthly debt payments more affordable, enabling consistent repayment and helping to build your credit score.
2. Because the repayment plan is legally binding, you’re considered to be making full contractual payments. Without a debt counselling order, making partial payments may harm your credit score.

Rebuilding Credit After Debt Counselling: Smart, Responsible Steps

After your clearance is issued and your credit report updated, you may re-enter the credit market. But proceed with caution.

Here’s how to rebuild wisely:

• Avoid rushing into new loans or credit cards, and only borrow what you truly need and can afford.
• Use credit responsibly to support long-term goals.
• Make on-time payments and keep your credit utilization low (aim for under 30% of your available credit).

Tip: Use budgeting tools like the IOS Numbers Budget Template, Excel, or apps such as 22seven or GoodBudget to track spending and repayment progress.

Rebuilding your credit profile is a long-term journey. Make sure to:

• Avoid missing payments or defaulting.
• Keep a healthy mix of credit types (e.g., retail accounts, mobile contracts).
• Regularly check your credit report for accuracy.

 

Planning Major Purchases: Cars and Homes After Debt Review

With your credit record restored, consider applying for vehicle or home financing. However, credit approval is only one part of the picture.

Before taking on large purchases:

• Use affordability calculators to assess how much you can realistically afford.
• Factor in all indirect expenses:

*Vehicle: fuel, insurance, service costs

*Home: electricity, water, rates, levies, maintenance

• Consult with a financial advisor for tailored guidance.
• Don’t jump at the maximum amount offered.

Just because you qualify for credit doesn’t mean you can afford the full cost of the lifestyle it entails. Budget wisely.

Sustaining A Debt-Free Living in South Africa: Habits That Work

Living debt-free requires long-term discipline, especially in light of rising living costs. Here are practical habits to stay financially strong:

 

Monitor Income & Expenses

Use budgeting apps to keep track of every rand coming in and going out.

 

Identify Budget Leaks

Examples of common “budget leaks” include:

• Unused subscriptions (streaming, gym)
• Frequent takeaways
• Impulse online shopping
• Cutting just one or two of these can save you hundreds of rands monthly.  

 

Build an Emergency Fund

Automate savings by setting up a debit order to move money into a separate account as soon as your salary lands. This ensures you’re prepared for surprises, without falling back into debt.

 

Pay Yourself First

Treat savings like a fixed expense. Set aside a portion of your income, even if it’s small, in a savings account and leave it untouched.

For example, if you earn R10,000, save R500 automatically at the start of the month.

 

Final Thoughts: Your Journey to Debt-Free Living Starts Now

Completing debt counselling is a significant milestone and the beginning of a brighter financial future. By clearing your name, using credit responsibly, and adopting strong money habits, you can enjoy lasting financial freedom.

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