The debt review process can be a challenge, but its main purpose is to assist in managing debts and ultimately achieving financial stability and recovery. Many people wonder how long it will take to remove the debt review flag from their credit report once you have completed the process.
In this blog we are going to discuss the key factors affecting the duration, what you can do to receive your clearance certificate and to ensure that your debt review flag is successfully removed from your credit report.
Factors That May Prolong The Debt Review Process:
Amount of Debt:
The total amount of your debt can directly affect your repayment period. The higher your debt, the longer repayment period you will have.
What you can afford:
The amount of debt that you can pay off each month will depend on your income and your new repayment plan. The more you can to pay towards your debt will assist in shorting the debt review process.
Negotiated Rates:
Your interest rates and fees will be negotiated during the debt review process. This can assist in shortening your repayment time.
Creditor Agreement:
During debt review your debt counsellor will negotiate a new repayment plan which includes reduced interest rates and fees. Creditors will either accept or decline the newly proposed plan which can also increase the duration.
When will the Debt Review Flag be Removed?
Debt review lasts until you have fully settled all your outstanding debts, excluding your home loan (bond), which only needs to be up to date (not fully paid off) by the time you exit the debt review process.
The exact duration depends on:
- The total amount you owe
- How much you can afford to repay each month (based on your negotiated repayment plan)
Most debt review plans typically run between 3 to 5 years.
When will I receive my Debt Review Clearance Certificate?
In order to receive your clearance certificate also known as a Form 19, all your debts must be paid in full and proof thereof received. Your debt counsellor will then provide you with the clearance certificate.
Once you receive your clearance certificate, it serves as proof to the credit bureaus that you have fully settled your debts and successfully completed the debt review process. This allows the debt review flag to be removed from your credit profile.
When will my credit status be updated by the Credit Bureaus?
When you receive your clearance certificate your debt counsellor will also forward it to all the credit agencies. To ensure that your credit report has been updated and the flag removed make sure to check with your debt counsellor as well as the credit bureaus.
The NCR ( National Credit Regulator) allows up to 21 business days for the credit bureaus to update your profile after they have received your clearance certificate.
What can I do to ensure the removal of the Debt Review Flag?
View your credit report regularly:
Make sure that all your details are correct and that the removal of the flag was allocated. This can assist you to avoid any further issues and allows you to be in control of your financial recovery.
Try and resolve any issues:
We would advise you to act quickly and fix any errors that might have occurred in your credit report. This unfortunately can have an affect on your credit score.
Track your progress:
By seeing positive changes in your credit score will encourage and motivate you to reach all your new financial goals.
Is there anywhere to check if my Debt Review Flag has been lifted?
It is easy to request and review your credit report in the comfort of your own home. We have listed all the agencies including Debt Rescue, where you can get your free credit report from.
- Debt Rescue offers a free credit report on their website.
- TransUnion allows you to request one free credit report per year
- Experian also provides you the ability to request your credit report.
- XDS offers a consumer focused credit report.
How can I achieve financial freedom?
By fully understanding each step of the process, you can successfully complete your debt review. This will ensure the debt review flag is ultimately removed from your credit profile.
- Stay Committed to the process; By strictly following your new repayment plan you will ensure completion of the debt review process and receive your clearance certificate.
- Keep in Contact: Always ensure that your debt counsellor is fully aware of any changes in your financial situation and always provide all updated documents. This will ensure that all your paperwork is processed correctly.
- Regularly review your Credit Report: By reviewing your credit report you can ensure that all updates are correct once you have completed the debt review process.
- Be Aware of your Rights: By understanding your rights and responsibilities under the National Credit Act, you will ensure that there are no misunderstandings or delays to lift the debt review flag.
By doing your part regarding your debt repayment plan and communicating with your debt counsellor, you’ll stay on track. Regularly checking your credit profile will help you recover financially and start your debt-free life.
How can we help you?
Are you struggling with debt while earning an income? Let our expert debt counsellors offer you a free, no-obligation assessment, designed to consolidate your debts, lower your monthly repayments, and give you the immediate financial relief you deserve.
