If you didn’t know, blacklisting is a thing of the past.
Blacklisting was previously used to indicate that someone has negative information on their credit report which technically excluded them from being considered for any credit. However, over the years the term has become uncommon as credit bureaus have changed the nature of their operations.
Today, a credit score report is what is being used to determine one’s credit eligibility as it reflects both the positive and negative information that relates to one’s credit history.
Still, many people are in the dark as they are made to believe that blacklisting exists, well, it is a common misconception that credit blacklisting is a thing, but it’s not. When people hear the term “blacklisting,” they assume it means that they are going to be cut off from all financial services, but that’s not how it works.
To take you out of your misery, we have compiled this article to inform you how you can’t be blacklisted.
How Credit Works
When you apply for any credit or a loan, your application gets reviewed by a lender and they decide whether or not to approve your credit application based on their own criteria. The lender will look at your credit report and other factors like income, debt load, and more to determine if you meet their standards for approval, they do not decline applications because someone else told them to say no.
Yes, some banks and financial institutions are known to deny loans or credit to people who have had past financial problems, but this practice is not widespread. If you’re worried about your ability to access credit, talk to a financial advisor or an attorney who can help you figure out what your options are and how to get them.
The idea that a credit report can be used to discriminate against you has been around for decades, but it’s not true. The Fair Credit Reporting Act specifically prohibits the use of your credit report to make hiring decisions, renting or selling property or insurance coverage.
The myth of financial blacklisting is the idea that if you have a negative credit score because of late payments, your ability to use credit cards, rent an apartment, or find a job will be severely limited.
It’s illegal for companies to discriminate against you based on your credit score. And even if they did, there are plenty of other ways to build your credit.
How To Keep a Positive Credit Score
Maintaining a positive credit score is very much necessary. In fact, it puts you in a better position financially as you will be considered for financial assistance at a much cheaper rate than someone who has a much lower credit score.
Your credit score can go down if you don’t pay your bills on time, but it’s not because someone has blacklisted you. It’s because the company that lent you money doesn’t want to take any more of a loss by waiting for you to repay them.
There are different ways that you can adopt as a standard practice to keep your record clean or to improve your credit score, here are some of the few:
- Pay all your credit instalments in full and on time.
- Don’t take anything on credit if you know that you won’t be able to pay it back with interest within the stipulated period.
- Monitor your credit profile, this will help you to pick up any fraudulent activities in time. You may submit a dispute for any wrong information.
- Don’t take out a lot of credit at the same time as this will affect your credit score negatively. This also applies to credit enquiries.
- Avoid closing accounts/credit cards, rather limit your usage.
What to Do When You Are Told That You Are Blacklisted
Well as stressful as it might be, don’t panic! The first step to getting back on the road to financial stability is to remain calm, cool and collected.
Seek help from a professional debt counsellor. They can help you organise your finances and determine what steps to take next.