Loans in South Africa 101: Can You Be Blacklisted?

August 01, 2019

Many people think that their loan applications get rejected because they are blacklisted. The truth, however, is that “blacklisted” is a misleading word. Despite that, it is still widely used among consumers. The term dates back several decades ago when credit bureaus only stored the negative credit information of borrowers. For this reason, it was perceived that people are blacklisted by credit bureaus for their bad financial performance, including arrears, defaults in payments, and missing court judgments.

A lot of things have changed, however, over the recent decades when it comes to the proper use of credit reports. Credit bureaus now include positive credit information as well, aside from the negative history.

Today, your credit report also includes your on-time payments, the amount of credit you are able to pay off, and how your credit grows. This information is combined with negative records. Together, they form your credit score.

Your credit score is what gives lenders and banks an insight into how well you can manage your debt. It is a major consideration in determining whether you are qualified or not for any finance application.


Are you really blacklisted?

Technically, you are not blacklisted. It is just that when your application is rejected, you probably have a low credit score because of more negative financial records of your credit habits. Creditors rely on your credit history, and there is no other list that exists apart from your credit report.


How to get out of a “blacklist”

When you find yourself in a situation that everyone rejects your finance application, it is never too late to get back on track. As long as your credit score remains low, you will have difficulty getting approved for a loan or any credit. To improve your credit score, you must start paying your dues on time. Don’t take any debt you can’t afford to pay, and start living within your means. 

Start paying your existing debt as well. Contact your creditors and negotiate for a new payment arrangement that will suit your budget. Start with the ones that have high-interest rates and see if you can get a lower one so you can pay off your overdue debt. 


In summary

Creditors and lending agencies assess your credit history and credit score when evaluating your eligibility for a loan. Blacklisted is a misleading term in this area, as there is no other list they use apart from your credit report. There is no such thing as a credit blacklist, but being denied several times can feel like there is.

Your bad records are unlikely to disappear, but you can improve your credit score and considerably increase the chances of your credit application being approved by making better financial choices. Start developing smart money habits, such as paying your bills on time. Learning basic personal finance can help considerably. Denying yourself some pleasures and intentionally taking steps towards a better score will help you in the present as well as in the future.

When you’re ready, apply for a payday loan online through Hoopla Loans. Even with bad credit, you will still be considered. You can get an instant decision, and when approved, you will get your money in your account immediately. The application is 100 percent free!