How Debt Review Affects Your Credit Score in South Africa

When a debt counsellor accepts your application, they notify the registered credit bureaux that you are under debt review. The bureaux record a marker against your name so that credit providers can see you are in a formal restructuring process. This is required under the National Credit Act and is designed to protect you from further borrowing while you repay existing debt.

It is important to distinguish this flag from a default judgment or administration order. The flag does not mean you have been blacklisted; it means you are actively working through a regulated repayment plan.

Your credit score is a calculation based on payment history, amounts owed, length of credit history, new credit and credit mix. Being under debt review does not automatically delete your score, but the flag and the closure of accounts while you repay can influence how the score behaves.

Because you stop using credit accounts during debt review, the active credit information used to calculate a score reduces over time. Many consumers see their score settle or even improve as restructured payments are made consistently, because missed payments and arrears stop accumulating.

The most important factor is whether your restructured payments are made reliably through the Payment Distribution Agency. Consistent payments demonstrate responsible conduct and can support your profile even while the flag is active.

Missed payments, by contrast, can still be reported by credit providers and may negatively affect your profile. If you expect a problem with a payment, contact your debt counsellor before the payment date.

When your qualifying debts are settled, your debt counsellor issues a Form 19 clearance certificate. The certificate is submitted to the credit bureaux, which are required to remove the debt-review flag and related adverse debt-review records.

After removal, your profile reflects your remaining accounts (such as an ongoing home loan) and your payment history. From there, responsible use of a small credit facility can help you rebuild a healthy score. See our guide on rebuilding credit after debt review.

Credit bureaux are generally required to update records within a set period after receiving the clearance certificate. In practice, it can take several weeks for all bureaux to reflect the change, so it is worth checking your report after completion.

If the flag is still showing after the expected period, contact your debt counsellor, who can follow up with the bureaux on your behalf.