South Africans are drowning in debt. Of the 24.25 million credit active consumers, a staggering 9.85 million are unable to pay back what they owe to banks, retailers and telecoms providers.

This means more than 40 percent of South Africans who have bank loans, credit cards and retail accounts are in financial trouble.

NCR statistics as at end September 2016

According to the latest data released by the National Credit Regulator (NCR), nearly a quarter (22. 3 percent) of credit active South Africans are three or more months in arrears, as of the end of September 2016.

People with adverse listings (11. 3 percent), and those in arrears of up to two months (11. 8 percent), are the next best offenders as regards credit impairment.

A comparatively meagre group (6. 9 percent) of South Africans have had judgements and administrative orders granted against them, and added to their credit reports.

A spike in credit enquiries

South Africa’s poor credit rating figures have had an obvious knock-on effect. Banks and other institutional lenders are more circumspect as regards whom they are prepared to advance credit or lend money to.

In fact, enquiries on consumer credit reports have jumped by 4.5 percent quarter-on-quarter, and 20.7 percent year-on-year. Banks and other formal financial institutions account for 56.7 percent of credit report checks.

The consequences of a poor credit record

A poor credit record is a major financial stumbling block. As we can see from the figures above, banks and other financial institutions are increasingly using personal credit records to assess risk.

These records reveal the number of accounts a consumer has, his or her payment history, and any court orders or judgements. In South Africa, a poor credit record can spell disaster for your cash flow, as the vast majority of lenders will automatically reject credit or finance applications out of hand.

Are you one of the 9.85 million?

If you are part of an exponentially growing pool of people who are behind in servicing their debt, there are only two options available to you; rebuild your credit score, or find another way of borrowing money.

You can restore your credit rating by submitting ‘Confirmation of Settlement’ letters to all your creditors, getting the judgements rescinded and paying off the bad payments recorded in your payment history, one-by-one.

This can take up to a year to sort out. In the meantime, you’ll have no access to ready cash.

One alternative option for loans

If you need funds, one readily available option is to take a loan against the value of your car, boat, motorcycle or work van.

At Pawn My Car, we offer same-day cash loans that are paid directly into your bank account. The process is completely confidential and transparent. We have offices in Sandton, Cape Town and Port Elizabeth, and are known for our fast, efficient, reliable service.

For more information, contact us on 086 172 9648 or simply complete and submit our online application form

Complete an application now