Old debts don’t have to bring your score down. Follow our 5 simple steps to remove them from your report.
It’s frustrating having credit declined because of a debt you had years ago. That’s prescribed debt, and even though it has expired by law, it can still sit on your report and drag you down.
What creates this type of debt?
In South Africa, debt “prescribes” when the legal time limit for collecting it runs out. For most everyday debts like credit cards, shop accounts or bank loans, that’s three years with no payments made, nothing in writing and no court action. For bigger debts like home loans, the time can stretch up to 30 years.
Here’s an example. You stopped paying a clothing account in 2018 and forgot to pay your last amount but heard nothing from the shop about it. This year, your car finance is declined because that old account is still listed as unpaid. Legally, the debt has prescribed, but it’s still on your record.
How to remove prescribed debt
Step 1: Check your report
Start by getting your latest credit score and report. With Finance365, you get unlimited free checks and reports. Look for old amounts that are listed and note the last payment dates. This helps you confirm if the debt is prescribed.
Remember to avoid admitting that you have the debt in writing, or making even a small payment, if there’s nothing listed on your report. Doing this resets the clock and makes the debt collectable again.
Step 2: Only now put it in writing
If your old debt is listed or a debt collector contacts you, you then need to write to that company or person. State clearly that the debt has prescribed under the Prescription Act and that you dispute the listing under the National Credit Act.
Step 3: Follow the bureau process
Each credit bureau has a dispute process that is usually done online or by email. Send your documents to each of the bureaus and ask for the listing to be removed. By law, they must respond within 20 business days.
Step 4: Escalate for help if needed
If the bureau doesn’t resolve it in the 20 business days, you can escalate your case to the National Credit Regulator (NCR) or the National Financial Ombud (NFO). These organisations are there to protect your rights.
Step 5: Stay on top of your report
Once your debt is removed, keep monitoring your profile. Mistakes and delays happen, but the sooner you catch them, the easier they are to fix.
Why tackling this type of debt matters
Removing prescribed debt is one of the fastest ways to repair your credit score. It’s a bit like a good spring clean too! Done right, it clears away old baggage and gives you a fair chance when you next want to apply for credit.
Spotted any prescribed debt on your credit profile? Check your credit status today with us and take these 5 simple steps to clear them for good.
