What Happens to Your Credit When You Exit Debt Review?

Have you ever wondered what happens to your credit report and/or score after you have finished and left debt review? People ask us this a lot. Simply, the answer is that it depends on how you treat credit afterwards. After debt review, your credit is born anew and is as low as it was after you had just turned 18. This post will tell you what happens to your credit score after you have left debt review, how to clear your credit record, and how to build it back up again.

Your credit after debt review

We’ll compare debt review to addiction rehabilitation.

Coma Recovery

Debt review is like putting your credit in a medically mandated coma so it can get better. After it wakes up, it will most likely be helpless and need deep recovery.

Credit in a debt review coma.

Your credit score will likely be the lowest it has ever been. This is because the debt review flag signals that you are not responsible with credit and need your finances to be arranged– a sort of financial rehab, if you will.

Graduating rehab

Once you’ve paid up all your debts, you’ll get a certificate to say you’ve paid everyone back in full, called a clearance certificate. This is the certificate you’ll send to credit bureaus with us.

Outpatient treatment

Together, we’ll send your clearance and the details of your fully made payments to credit bureaus as supporting evidence that your name should be cleared from ITC (now called Transunion). You can keep building financial health even out of rehab by continuing to build your credit before you get your clearance certificate.

Credit rehab graduation!Mindfulness

A lot of staying out of debt and building credit is about being intentional with how you spend money. Addiction to money is like any other addiction: you need to be mindful of what helps you build credit so that you don’t overdose on loans again.

You can build credit without borrowing money by:

  • Paying existing debts on time
  • Keeping your oldest lines of credit active (keep old cards even if you don’t use them)
  • Maintaining a low utilisation rate.

After you get your clearance, the bureaus will update their records to reflect that you are no longer over-indebted. Then, you should wait for at least about 3 months and build credit by paying for things on time before taking out new loans.

Yes, your credit score will be low after debt review– that is to be expected. It’s what you do to build credit and how you dispute inaccuracies about your credit that impact your spending agency in the future.

If you need help with clearing your name with ITC (credit clearance), judgment removal, or debt review removal, contact Cape Town Legal Consultants. We’d be glad to be of service!