Defaulting on your payments means that you stop making your payments. This can have different effects depending on which accounts you default on. For example, the results of defaulting on your home loan is different than defaulting on your credit card accounts. Read more here...
Consumers are struggling to make their payments
With ever rising living costs and fuel prices, consumers are struggling more than ever to make ends meet. Compuscan data shows that there is a slight increase in 1-2 month and 3+ month arrears accounts – this means that more people are struggling to make their payments. Even though there is an increase in individuals who are struggling to make their payments, there is not an equal increase in judgments and administrative orders. This may indicate that an increasing number of individuals are being placed under debt review. Find out more about debt review, here or contact Compuscan.
What happens when you default on payments?
Defaulting on your payments means that you stop making your payments. This can have different effects depending on which accounts you default on. For example, the results of defaulting on your home loan is different than defaulting on your credit card accounts. Regardless of the types of accounts you default on, it will negatively impact your credit record and your ability to get access to further credit.
Remember: An informed individual is a protected individual!
Defaulting on your home loan payment is a serious transgression, but thanks to the laws in South Africa, you can’t suddenly be evicted if you miss a couple of payments. There are also laws about when you may be evicted and at what price your home may be sold by the banks or lender. For more information, you can visit SA Home Loans.
Defaulting on credit card and revolving accounts (store accounts for clothing, groceries, etc.), is on the increase according to Compuscan’s data and other commentators. Defaulting on these accounts will negatively affect your credit rating and your ability to access new credit. The effect of late payments on these types of accounts will lead to you paying more in the long term. Furthermore, non-payments reflect poorly in your credit history and negatively impacts your ability to access credit in the future. For tips on how to safely and effectively use your credit card, view our article on the My Credit Check blog here.
Tip: Another way of protecting yourself, is to make sure the information on your credit report is accurate. If it isn’t, you need to dispute it – find out how to dispute information on your credit report here. To get your credit report, visit www.mycreditcheck.co.za today!