JOHANNESBURG – “Blacklisting” is a term still freely used by many credit providers to prompt people with outstanding debt to pay up. But, blacklisting by credit bureaus was stopped many years ago. Most consumers, however, do not know this.
As recently as March this year, newspapers screamed out the headline: “Pay your e-tolls or you’ll be blacklisted”, only for the Credit Bureau Association to announce just one week later that motorists with outstanding SANRAL (the South African National Roads Agency Ltd) fees would not be blacklisted.
In fact, the term “blacklisting” should not have been used at all. According to an article quoting the National Credit Regulator (NCR) as far back as 2011, the term was long ago discarded from the South African credit industry’s vocabulary. It refers to a time when credit bureaus kept only negative or default data about consumers’ credit behaviour.
Blacklisting was, in essence, an informal term used to indicate negative information on someone’s credit report. It was widely used during a time when only negative data would be collected by bureaus. But the term is now obsolete. For several years, positive data has also been recorded in credit reports. This means there’s a greater number of elements included on your credit report to help lenders decide your creditworthiness.
Your credit score is calculated using your credit report data; the higher the score the more likely that you’ll be given credit by a lender. The lower the score, the higher the chance a lender may turn down an application for credit. But, even then, it does not necessarily mean a consumer’s behaviour has been bad or that they have been “blacklisted”. They may simply not meet the criteria that the lender has for granting credit.