Creditworthiness after Clearance Certificate?
After clearance is completed, your focus should shift to rebuilding your Credit Score ad overall Credit Profile. You can start by engaging in healthy credit habits, such as timely payment of bills, maintaining low credit utilisation ratios, and avoiding unnecessary debts.
After Debt Review it can take another 6 months
to rebuild your Credit Profile
When you exit Debt Review you have to rebuild your credit profile as an essential step towards achieving financial stability. It is unlikely that you will come out of the process being able to apply for big ticket items. Start small and build your profile up over 6 months.
Start by checking your credit report regularly to understand your current standing. Make timely payments to establish a positive payment history.
Additionally consider using a mix of credit types to enhance your profile and improve your credit score over time.
Focus on the following:
1. Payment history: Pay your accounts on time. Credit Bureaus record your payments over 24 months and show other Credit Providers that history.
2. Credit utilisation: Try not to exceed 30% of the credit facility granted. These include credit cards, revolving credit loans and store cards. Do not apply for too many personal loans as they max out credit utilisation and it takes time to reduce credit utilisation while paying down personal loans.
3. Credit Provider Enquiries: Too many inquiries can result in your credit report being flagged. If you are declined for credit by two Credit Providers, find out why before continuing to apply with other providers? You can also contact one of the credit bureaus for advice.
4. Affordability: Applying for credit that you do not qualify for will result in credit being declined. This will negatively impact your credit profile. Find out what you qualify for before applying for a credit facility, loan, vehicle, or home. Don't assume you know what you should qualify for. There are various factors that banks take into consideration which determine your affordability.
Go to: How to Improve Your credit score and Credit Report Information for more information.
Clearance Certificate Timeframe
There are several parties involved in the Clearance Certificate process. i.e. Debt Counsellor, National Credit Regulator, Credit Providers and Credit Bureaus. Each has its own timeframe to update systems correctly and information accurately.
It takes 4-8 weeks to finalise the Clearance Certtificate after Debt Review is Completed
The completion of the Debt Review process and receipt of your Clearance Certificate marks the beginning of the process of clearing your name from the Debt Review status. This process is crucial for restoring your financial creditworthiness.
Here are the steps and timeframes involved:
1. Paid up Letters: 10 working days (15 days in total)
2. Client documentation: Dependent on the client
3. Status Update: 1 working day (2 days in total)
4. Drafting of the Clearance Certificate: 3 working days (5 days in total)
5. Certification of Clearance Certificate: 3 working days (5 days in total)
6. Email to all Parties: Once the above is completed
7. National Credit Regulator update: 5 working days (8 days in total)
8. Credit Provider update: 10 working days (15 days in total)
9. Credit Bureaus: 20 working days (30 days in total)
10. Clearance check: We ask our clients to obtain a final credit report that lists 4 Credit Bureaus to check that the Debt Review notice has been removed and payment history updated.
Any issues will be resolved, otherwise the client is now credit worthy.
What is a Clearance Certificate?
A Debt Review Clearance Certificate, or Form 19, is a legal document issued by a Debt Counsellor to verify that a consumer has completed
Debt Review. It confirms and verifies that the consumer has fulfilled all their obligations under every Credit Agreement included in a
Debt Review Court Order or a Debt Review repayment agreement. There are also other factors that will allow you to apply for a Clearance Certificate, even if your debt is not settled in terms of the Debt Review Court Order.
This Clearance Certificate is issued by a Debt Counsellor when an individual completes the Debt Counselling process or where various factors allow for the Debt Review Clearance to be issued.
The Clearance Certificate (Form 19) is required to legally remove (or clear) the Debt Review status from the National Credit Regulators Database, the individuals Credit Report and also from the Credit Providers internal systems.
Even if the Debt Review notice is removed from the Credit Bureaus, future credit can be declined if it is also not removed from the Credit Providers internal systems.
A Debt Review Clearance Certificate (also referred to as a Form 19) is a legal document that confirms that:
1.You have successfully completed the Debt Review process and all debt is settled under the agreement.
2. If you were previously terminated from Debt Review, but you have settled the debt on your own and have paid up letters.
3. If you were previously terminated from Debt Review and your debt has prescribed. Please see Clearance Certificate Process for information on prescription of debt.
4. If you have obtained a Sequestration Order.
5. If you have obtained a Rehabilitation Order.
6. If court has determined that you are no longer over-indebted.
7. If you can prove that a Debt Counsellor placed you under Debt Review without your permission and the National Credit Regulator has determined the same.
8. Automatically in the event of death.
The Clearance Certificate process is crucial for restoring your financial creditworthiness
During the Debt Review process paid up letters are obtained and kept on record for Clearance at the end of the process. All paid up letters are required to provide proof that all debt that was placed under Debt Review is settled.
The National Credit Regulator's (NCR) database must be updated to the status applicable to the type of Clearance that will be issued. Status F2 is applied if you have unsecured debt only. F1 is applied if there was a home loan included. These are the main Clearance Statuses used, but there are other status indicators for the various reasons for Clearance. To view the other reasons for Clearance go to What is a Clearance Certificate.
Documentation is requested from the consumer which includes certified copies of Identity Documentation, proof of residence and a signed Power of Attorney. The Power of Attorney is required by the Credit Bureaus. The Debt Counsellor will provide the proof of debt placed under Debt Review, a screenshot of the Clearance status along with the paid-up letters.
The Clearance Certificate must be certified by a commissioner of oath.
All the above documentation is emailed to the various parties concerned i.e. NCR, Credit Providers and Credit Bureaus.
Each party has its own turnaround timeframe to remove the Debt Review notice, the longest being the Credit Bureaus which require 20 working days (30 days in total) to confirm the Clearance and credit report update.
Once all parties have confirmed Clearance, the consumer is regarded as credit worthy.
