13 May How Long After Debt Review Removal Can You Apply for Credit?

So, you’ve successfully escaped debt review and would like to take out more credit. If you are no longer over-indebted and feel that taking out more credit is worthwhile, you may wonder how long the debt review flag will stay on your credit record after it’s been removed. Plus, if it has been removed, this blog will discuss how you can build credit to build your chances of securing better loan and credit terms. We’ll also discuss ways to prevent further damage to your credit. Read on for how to regain financial health and take out new lines of credit after debt review removal.

How long after ridding your credit of debt review can you borrow money?

Generally, it’ll be really hard to borrow money if the debts you applied to debt review with are still on your credit report. If you somehow manage to get a loan, it’ll be with precariously high interest rates. Also, know that creditors may be extra reluctant to award you with loans if debt review is on your credit report, as this counts as reckless lending, which is illegal. Additionally, as of 2022, leaving debt review even if the court has not yet declared you over-indebted is no longer possible. As soon as you apply for debt review, you are in it until you’ve paid up everyone, no longer how long it takes.

However, should you have fully paid other debts or have a low outstanding balance (besides your mortgage). Otherwise, getting a loan is quite unlikely.

Factors that affect how long you should wait

It might take a while before the credit bureaus update their records and remove the debt review flag from your profile. Usually, after you submit your clearance certificate to credit bureaus, they have 21 days to update their records. It is an offence if they don’t. Then, you can technically apply for new credit in as little as 7 days after you’re cleared from debt review, but this is inadvisable.

Firstly, your credit score may still be down in the dumps because of your finances being rearranged. It’s best to wait at least 3 months and work towards building your credit score by paying expenses like insurance, cellphone contracts, and rent and utility bills on time. This will raise your credit score, if even by a few points.

After three months, check your credit score for free with one of the major bureaus, or South Africa’s most reputable, Credit Boost. You can use their free online credit score checker.

If you need help with exiting debt review or clearing your credit record after debt review, contact Cape Town Legal Consultants. Our legal experts have more than 15 years of experience helping consumers get back on to their feet and regain financial health.