Will You be able to Get Credit after Debt Counselling?
A consumer that is over indebt can apply for debt counselling with a debt counsellor. The consumer will apply for debt counselling, because his income is not enough to make the full installment on his debt each month.
The debt counsellor will assist the customer in the application process by negotiating a new affordable payment plan for the customer. The first action the debt counsellor will take is to notify all creditors that the customer is applying for debt counselling. Secondly the debt counselor will notify the National Credit Regulator that the customer is applying for dent counselling. Th credit rating agencies will be notify by the regulator of the customer’s intension.
The credit rating report will show that customer is in debt counselling. Creditors may not lend money to any person who is applying for debt counselling. The customer will stay in debt counselling until he has paid off his debt or ends his debt counselling himself. The credit regulator will be notified by the debt counsellor of the customer’s application for debt counselling and the regulator will inform the credit rating agencies.
A big advantage to the customer is that the credit rating agencies will remove the note on the customer’s credit file and the file will not show that the customer was in debt counselling. The credit file will only show if a customer is currently in debt counselling and not that he was in debt counselling in the past. After a client completes his debt counselling there will be no trace on record that customer was in debt counselling.
What we don’t know, because debt counselling is still new, is if creditors will make notes of debt counselling. The bank will obviously know that this customer was in debt counselling before if the bank was one of the customer’s creditors. Nothing stops the bank from making a note on the customer’s file at the bank that he was in debt counselling before. When the client applies for a loan again after debt counselling, they will know that this customer has been in debt counselling.
We don’t know if the bank will penalize the customer, because all debt was settled before the customer came out of debt counselling. The banks might ignore that the customer was in debt counselling and only look at the customer’s current financial position.
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