Prescribed Debt and how to remove it from ITC

What is prescribed debt?

In short, prescribed debt is old debt that has not been acknowledged over a period of three years. If a credit provider does not demand payment from you, start legal action against you or communicate with you in any way for three years, a debt becomes prescribed. That means the debt is essentially cancelled and the credit provider loses his right to claim payment on the debt ever again.

How do you get a prescribed debt off your credit report?

Contact the credit provider and request the removal of the prescribed debt from your credit profile. 2. Contact the major credit bureaus (Transunion, Experian, XDS, CompuScan) directly and lodge a dispute to request that they remove the prescribed debt from your credit profile.

How long does it take for debt to prescribe?

Not many consumers know that most debts expire, or prescribe, after three years, and they can free themselves of this debt provided that they don’t interrupt prescription by acknowledging the debt or making payments towards the debt during the three-year period

Which debts can prescribe?

Retail accounts Credit card accounts Telkom accounts Personal Loans / Pay-day Loans Gym memberships Cell phone accounts Monies owed on vehicle finance

Loans Debt set-off: How to curb banks taking your cash

 Loans Debt set-off: How to curb banks taking your cash

Cape Town – Consumers seeking loans should ensure the lender is a different credit provider to the one they bank with, Summit CEO Clark Gardner said in reaction to court action being taken against Standard Bank.

The bank told Fin24 this week that it will oppose a bid by the National Credit Regulator (NCR), which wants a court to order that the common law set-off has been superseded by section 124 of the National Credit Act (NCA).

“The NCR had received complaints from consumers, in relation to instances where the bank had taken monies, which had been deposited into their accounts held with Standard Bank and used these amounts to settle arrears on Standard Bank debts,” Jacqueline Peters, manager of investigations and enforcement at the NCR, told Fin24 on Tuesday.

READ: Credit battle begins: NCR takes bank to court over common law set-off

“Consumers in these instances are left with no monies for their ordinary day to day living expenses or other debt obligations, ultimately leaving already over indebted consumers in a far worse situation,” said Peters.

NCA does not provide sufficient clarity – Gardner

Gardner said the NCR’s case against Standard Bank was yet another example of the NCA not providing sufficient clarity to all parties involved.

“In the case of setting off outstanding and arrear debts against savings one needs to look at how the set-off took place.

“Where the right authority was provided by the consumer to the credit provider then little relief can be provided. However, in many instances we have seen it would seem the set-off is done in a manner in breach of Section 90(2) (m) in that it gives priority to payments for the credit provider over any other credit provider.

“All credit providers should have equal opportunity to receive payments and therefore are required to make use of the standard or preferential debit order payments processes.”

Debit order mechanism is fairer – Gardner

Summit believes the debit order mechanism is a fairer process to set off payments in that the consumer authorises an amount and credit provider to be paid on a specified date.

“This should mean that the consumer is aware of the payment and can budget for it accordingly,” he said.

Gardner said the NCA and the evolution of the credit industry is planning to move away from leaving the consumer in desperate situations and instead ensure they are protected from unfair credit provider behaviour or from their own desperate behaviour.

“We strongly encourage this shift, which may mean unsecured credit is less accessible in the short term as only financially healthy and able consumers access such funding,” he said.

“The problem in allowing set-off, and I am not aware of the details in this case, is that the amount and date of payment can come as a complete surprise to the consumer who then can find them in the most desperate of situations financially,” said Gardner.

Advice to consumers

“Our advice to consumers to prevent set-off is to ensure that your lender is a different credit provider to the one you bank with,” he said. “This ensures that payments can only be collected via authorised debit orders, which have an effective dispute process where necessary.”

Further, if a consumer cannot afford all their debt repayments they should take effective action instead of hiding from their lenders or accessing additional credit, Gardner cautioned.

“Effective action varies from negotiating with your lenders, reporting reckless lending to the National Credit Regulator to approaching a reputable debt counsellor.”

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Repairing a bad credit score…….


When talking about a bad credit score this refers to your credit history and to repair this damage is a draining task, a person should manage their finances properly making sure that they have a budget that is prioritized so that you don’t default on your payments

How do I repair a bad credit?

To repair a bad credit score is a lot of work, it requires discipline and good budgeting

Tip 1

Pay-down balances: In order to improve your credit score you need to pay down your balances, this may seem to be ineffective when you already have a bad credit score but it actually helps to make up the damage that has been done to your credit score.  Even when you pay off all your balances you may find out that you have a high utilization ratio than expected. This may be due to previous default, paying regularly will improve your utilization ratio and credit time but not damage is not done instantly and the repairing process isn’t instant as well it will take time and payment without defaults.

Tip 2

Eliminate nuisance balances: This is a good way to better manage your credit, nuisance balances are balances that are easily avoided. An example is if you have two credit cards, why not cancel the other and have only one credit card making it easy for you to pay balances on the single card then paying balances on two credit cards. Paying well on this one credit card can help you improve your credit score then defaulting on one card and paying well on the other, this is meaningless because your credit score is being brought down by the card that has defaults.

Tip 3

Don’t remove (good) old debt on your report: Some people have a firm belief that if they old debts are reflected on their credit report, this has a bad notation on their credit score. This is indeed incorrect it is actually the opposite, old debts that have been paid off are historical proof that you can pay of your debts. They make your report more appealing, so when looking for credit this doesn’t count against you but rather it works for you.

To improve your credit score try to leave the good old debts as long as possible on the credit report so that the report is more appealing and magnificent to the eye that catches it.

Tip 4

Always pay bills on time: Paying your bills on time is important for improving your credit score what may seem like a small thing, may just turn out to be a big issue later on. A default is a default no matter how small, many small defaults constantly occurring make up for continues defaults and when combined they can be very damaging to your credit score. Credit score are determined by what is represented on your credit report, so if all those small defaults are represented on your credit report your credit score will be affected. A good credit score is determined by month to month on time payments

Tip 5

Stay away from risk: The biggest risk to your credit score is hinting at risk, this means that you trend on the line of being seen as a risk by creditors. This is identified by sudden change of behaviour like suddenly missing payments or paying less on monthly payment. This makes you appear as unreliable, other red flags would be to take out cash advances or use cards at business that at a later stage can been seen a money stress factors.

Tip 6

Obsession is bad: when looking to get credit you should be less focused on your credit score and more focused on making your payment on-time and to the correct amounts, the credit score will be a reflection of your payment habits and your credit score will improve.

A credit score is taken from your credit history good payment constantly over a period of time improves your credit score. To repair a damaged credit score is simply to be discipline with your payments, paying on time and the correct amounts. Being patient and knowing that it will take time to repair the damage is also being part of it.

If you feel that the debt is too much to pay by yourself and you need help don’t take out a loan to repay the debt but rather consider debt review. Taking a debt to close of another debt is still a debt and you will still have to pay back that debt so it holds no improvement of your financial situation.