People seem to be under the notion that “if I skip a payment I’m automatically in the dwang…”
No, you should not get blacklisted for paying late, depending on how late your payments came in and depending on your definition of blacklisting that is.
When you pay on time, late or skip a payment, your credit grantor will report this to a credit bureau. This is what the credit industry refers to as payment behavior and will be reflected in your account history of your credit report.
A late payment here and there is really not much of an issue, however if all your accounts are always paid late then you might have an issue getting credit or negotiating better interest rates.
One thing to keep in mind is, not only will an excellent credit report help secure the credit you need. But it can help you negotiate better interest rates too.
Now if by blacklisting you mean loading a default on your name, it gets technical but (simplistically put) the credit grantor would have to write the amount off first, which will not happen on an account that is 30 days overdue.
Just for interest’s sake, arguably the most profitable customer for a credit grantor is one who pays late and recovers from time to time. This since the credit grantor charges interest in the form of penalties each time your payments is late and when you do recover, they made more money from you than if you had paid on time. Double whammy! Interesting neh?
What’s a common occurence in the home loans market is people getting declined nowadays by the credit departments for being a late payer…
What tends to happen is if you’re sitting on the fence i.e. a borderline case of whether or not your bond is going to get approved and the banks pick up that you’re a slow payer or a late payer always missing your payment dates, they will most likely decline you. Not because you’re listed but because your credit payments look shoddy!
Thank you for your comment Wizzardman, I couldn’t have said it better myself. This gives a practical example of how paying late can affect a consumer.
I have recently known that I have been blacklisted by an institution i am renting at, of which i have made payment in the previous month.
What is the protocol in blacklisting a person. For I did not have any indication to them about their intention or is automatic to do so when they feel like it?
Hey Tumelo,
This realy depends on what you mean by blacklisted. Is it a judgement or is it a default? Or did they merely report that you skipped a payment?
The law says you have to be notified before, almost a month’s notice.
L8r!
I am in the home loan market as well. There is a few instances where I have seen people getting blacklisted without them even knowing about about it.
It seems like they blacklist you whenever they feel like it. I know there is a law protecting us against these kinds of things, but they don’t care about it. So I think the best thing to do now is just to keep your side clean and have a good credit record…