Everyone has heard of someone being “blacklisted” before. Many consumers think that they are on some sort of blacklist. Being listed on a blacklist is commonly mistaken for a formal and controlled mark on a consumers credit report. This often prevents them from taking out further debt. An actual list does not exist and there are no strict, hard and fast rules to becoming “blacklisted”.

What does blacklisted mean and how does it work?

It is not possible to look at a credit report and say that a person is blacklisted – this is not how it works. Your credit history and credit score determines whether you can take out more debt, not a list.

If you have a low credit score and bad credit history you would struggle to get new loans. This is what is known as being on the blacklist. A credit score could be low for a number of reasons, these could include:

• Missing debt repayments
• Using too much debt relative to your earnings
• Making lots of debt enquiries in short space of time
• Missing cellphone contract payments
• Using lots of available debt in a short period of time
• Failing to pay back arrears and short payments
• Legal action
• Judgments, defaults, adverse accounts

So, if you are applying for debt and being declined, it is likely you are not qualifying. This does not mean you are on a list or a credit provider has blacklisted you. Often it means your credit score is low and you are too risky to lend to at that point in time.

If you think you are blacklisted, this is what you can do

Consumers think they are blacklisted when they are unable to take out any more loans. Actually they just fail to meet the minimum criteria to take a loan for a credit provider.

There are a number of remedies for consumers who have low credit scores. If you cannot get any loans or use more credit you must try to improve your credit status. If one cannot get any more debt because they currently have too much debt it is not wise to try get another loan. This could only make the problem worse, not better. Often consumers think that a consolidation loan is the answer to debt problems, but these only work in specific situations.

Click here to see what Transunion – South Africa has to say about being blacklisted in South Africa.

If a consumer is struggling to pay their debt back and this is causing stress and anxiety, we recommend speaking to a debt counsellor. Not sure how to choose the right debt counsellor? Read This. Asking for help is often the first step in the right direction. Acknowledging that you may be struggling can help you find a solution.

How can a debt counsellor help you?

A debt counsellor can do an assessment and give advice on ways to improve ones credit score. A consumer may need some budgeting advice, but maybe they need a solution that will help them get out of debt. A formal solution, such as debt counselling, was put in place to help over-indebted consumers. Read 4 common misconceptions about debt counselling to help get a better understanding of the process.

Contact Vantage Debt Management for a free assessment, impartial and transparent advice.