How Does Credit Clearance Work in South Africa?

Credit clearance refers to the process of resolving and improving one’s credit history after facing financial difficulties or having a poor credit score. This process is crucial for individuals who want to rebuild their creditworthiness and gain access to financial products with more favourable terms.

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How Do I Clear My Credit Score?

This is how to clear your credit score.

Assessment of Credit Report:

Begin by obtaining a copy of your credit report from a credit bureau in South Africa, such as Experian, TransUnion, or Equifax. You are entitled to one free credit report per year.

Identification of Negative Information:

Review your credit report to identify any negative information, such as late payments, defaults, or judgments. This information contributes to a lower credit score.

Settling Outstanding Debts:

Address any outstanding debts or accounts in arrears. This may involve negotiating with creditors to settle debts, setting up payment plans, or paying off the balances in full.

Debt Rehabilitation:

Engage in debt rehabilitation programs, like our Debt Review or credit clearance service,  if necessary. These programs may be offered by credit counselling agencies like Cape Town Legal Consultants and can assist in managing debts and improving financial literacy.

Issuance of Clearance Certificate:

Once debts are settled or arrangements are in place, you can request a clearance certificate from the relevant creditors. This certificate confirms that you have fulfilled your financial obligations.

Submission to Credit Bureaus:

Provide the clearance certificate to the credit bureaus. They will update your credit report to reflect the resolved or settled status of the accounts.

Credit Score Improvement:

Over time, as the negative information is replaced with positive payment histories, your credit score should start to improve. Consistent, responsible financial behaviour is key to rebuilding your creditworthiness.

Patience and Monitoring:

Rebuilding credit takes time. Regularly monitor your credit report to ensure that the information is accurate and up-to-date. Check for any discrepancies and address them promptly.

Do you need assistance with clearing your credit report? Get in touch with our esteemed Cape Town Legal Consultants for expert advice now.