What is bad debt?
Well it’s simple…
- If you pay your account late that’s bad credit – i.e. your Edgars or Foschini account is due on 25th and you pay on the 26th of the month. This goes on for 3 months, the account departments then list you as a late payer.
- If i pay you by cheque and: My cheque bounces in your account you take the flak, My cheque takes 10 days to clear and your debit orders bounce even if the money is deposited but not cleared you take the flak.
- I don’t pay my accounts – i.e edgars, that’s bad debt.
- My address changes or does not change and the accounts are sent to the wrong place that’s my problem and I will be listed.
Remember, that with a bad credit record you cannot get a home loan.
There are two main credit bureaus in South Africa:
- One in 4 people is negatively listed on these credit bureaus
- Fact: most people don’t even know that they are listed!
- You have a 25% chance of having a negative credit record with the bureaus
- If you have a negative credit record you will not be able to buy a car, a house, anything on credit, enroll your kids in school, rent a house, get that job or promotion