Need Credit Information Amnesty?

<img src="credit cards.jpg" alt="Credit cards" width="150" height="113">

What does Credit Information Amnesty mean?

Soon South African consumers will have any undesirable credit information removed from their credit records. This act should not be interpreted as debts written off. It is unfortunate that the word amnesty was used, as it translates to forgiveness which is the wrong perception. Some debtors could now stop repayments of debt.

It is important that consumers understand they are still required to repay any existing debt as no debt is going to disappear. The process of credit information amnesty is not simple which leads to confusion for consumers to understand what information will be removed and what not.

Regulations for Removal of Adverse Credit Information

Information relating to paid up judgments wil be removed. Registered credit bureaus must remove the information relating to a negative credit history within 2 months. When removed the information cannot be recalled on the credit bureau’s register or be given to credit providers during or after the 2-month period from April 1.

From then on credit bureaus are required to remove all information relating to paid-up judgments received by credit providers. Credit providers in turn are not allowed to use negative consumer credit information for any reason, including credit scoring and assessment.

Consumers will not have to go to court to cancel a judgment, once the capital portion of their debt is paid in full. It will be done automatically and consumers will have no excessive legal fees. Their credit record will not reflect the judgment and they will not be negatively affected when applying for a job or rental contract.

Once consumers have paid their debt in full, information on their credit record for late payments, missing payments, or not paying at all, will be automatically removed.

Why Credit Information Amnesty?

The Department of Trade and Industry (DTI), deems the regulation necessary because, among other things, credit information can harm an opportunity to employment. Consumers whose financial positions have changed will be given the ability to start on a clean slate and maintain a clean credit record in future.

A second chance for all consumers with a bad credit record!

KP_WB_970x250

Ref.: http://www.moneyweb.co.za/

This article originally posted on http://www.dial-direct.co.za and reposted here with permission.