One of the biggest concerns people have about debt review is how it will affect their credit score. Will it ruin your credit forever? Will you ever be able to borrow again? The truth is more nuanced — and more positive — than most people expect. This guide explains exactly what happens to your credit score during debt review, and how to rebuild it once you complete the process.
How Debt Review Affects Your Credit Score
When you enter debt review, your debt counsellor notifies all four major credit bureaus in South Africa:
- TransUnion (formerly ITC)
- Experian
- XDS (Xpert Decision Systems)
- Compuscan
Each bureau then places a debt review flag on your credit profile. This flag is a notification to all credit providers that you are currently under debt review and that your debts are being restructured through a legal process under the National Credit Act.
The Debt Review Flag Explained
The debt review flag tells credit providers two important things:
- You are under a legal debt restructuring process — your debts are being repaid in an orderly and affordable manner under supervision of a registered debt counsellor and a court order.
- You cannot be granted new credit — credit providers are legally prohibited from extending any new credit to you while the flag is active. This includes loans, credit cards, store accounts, and vehicle finance.
While this may seem restrictive, the flag serves a critical protective purpose: it prevents you from accumulating more debt while you are working to pay off your existing obligations. It also signals to creditors that you are taking responsible action to address your financial situation — not simply ignoring your debts.
What Happens to Your Score During Debt Review
During debt review, your credit score becomes largely irrelevant. Here is why: the debt review flag prevents you from applying for any new credit, so your credit score is not being used for any lending decisions.
However, there are two important things happening behind the scenes:
- Consistent payments are recorded positively: Every monthly payment you make through the Payment Distribution Agency (PDA) is reported to the credit bureaus. This builds a positive payment history, which is the single most important factor in your credit score.
- Debt review protects you from further damage: Without debt review, missed payments lead to defaults, court judgments, repossessions, and garnishee orders — all of which cause severe and lasting damage to your credit profile. Debt review prevents all of these outcomes.
In other words, while your score may not be actively improving during debt review, it is being protected from far worse outcomes.
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The debt review flag remains on your credit profile for the entire duration of the debt review process. This typically takes 3 to 5 years, depending on the total amount of debt and the restructured repayment plan.
Once you have paid off all your debts and your debt counsellor issues your clearance certificate (Form 19), the certificate is sent to all four credit bureaus. The bureaus are then legally required to remove the debt review flag from your credit profile within 7 to 21 business days.
After the flag is removed, your credit profile shows that you have completed debt review and all debts have been settled. You are free to apply for credit again.
Important: The debt review flag protects you MORE than it hurts you — without it, creditors would pursue judgments, repossession, and garnishee orders which are far more damaging to your credit score. A court judgment stays on your credit report for 5 years, while the debt review flag is removed as soon as you complete the process.
Credit Impact: With Debt Review vs Without Debt Review
Understanding how debt review compares to the alternative is critical. Here is what happens to your credit profile in each scenario:
| Credit Impact | With Debt Review | Without Debt Review |
|---|---|---|
| Credit flag | Debt review flag — removed after clearance certificate | Defaults, judgments — stay on record for 5 years |
| Payment history | Consistent payments recorded positively each month | Missed payments, defaults, and arrears recorded negatively |
| Court judgments | Prevented — creditors cannot obtain judgments | Likely — creditors pursue legal action, judgments recorded |
| Asset repossession | Prevented — assets protected by court order | Likely — car, furniture, and other assets repossessed |
| Garnishee orders | Prevented — salary protected | Likely — creditors attach your salary directly |
| Recovery timeline | Flag removed within 21 days of clearance — clean slate | Judgments and defaults remain for up to 5 years after settlement |
| Ability to rebuild | Start rebuilding immediately after clearance | Lengthy process — must wait for negative records to expire |
Rebuilding Your Credit Score After Debt Review — Timeline
Once you receive your clearance certificate and the debt review flag is removed, your credit rebuilding journey begins. Here is a realistic timeline of what to expect:
The debt review flag is removed from your credit profile. All debts show as settled. You are free to apply for credit again. Your score may still be low, but you have no negative marks — a fresh start.
Open a small, manageable credit account — such as a store account or a secured credit card. Use it for small purchases and pay the full balance every month. This starts building a positive payment track record.
With consistent on-time payments and low credit utilisation, your score will show meaningful improvement. Many people move from a poor score to a fair or average score within this period. You may start qualifying for basic credit products.
With continued responsible credit behaviour, most people achieve a good credit score within 12 to 24 months. You may qualify for vehicle finance, home loans, and other major credit products at competitive interest rates.
8 Practical Tips for Rebuilding Your Credit
Follow these proven strategies to rebuild your credit score as quickly and effectively as possible after debt review:
Request a free credit report from all four bureaus (TransUnion, Experian, XDS, Compuscan) within 30 days of receiving your clearance certificate. Verify that the debt review flag has been removed and all debts show as settled. Report any errors immediately.
Open a store account with a low credit limit — such as Woolworths, Edgars, or Mr Price. Use it for small, planned purchases like groceries or clothing, and pay the full balance every month. This is the easiest way to start building a positive credit history.
A secured credit card requires you to deposit money upfront as collateral, and your credit limit is based on that deposit. This eliminates the risk of overspending while still building your credit profile. Several South African banks offer secured credit card products.
Payment history is the single most important factor in your credit score. Set up debit orders for all accounts and never miss a payment. Even one late payment can undo months of progress. Treat every due date as non-negotiable.
Credit utilisation is the percentage of your available credit that you are using. Aim to keep this below 30% at all times. If you have a R5,000 credit limit, keep your balance below R1,500. Lower utilisation signals to lenders that you are not dependent on credit.
The budgeting discipline you developed during debt review is your most valuable asset. Continue tracking your income and expenses, live within your means, and build an emergency fund. A budget keeps you in control and prevents the debt cycle from starting again.
Every credit application triggers a hard inquiry on your credit report, which temporarily lowers your score. Space out credit applications and only apply for credit you genuinely need. Multiple applications in a short period signal desperation to lenders.
Just because you can access credit again does not mean you should. Borrow only when necessary and only what you can comfortably afford to repay. The goal is to use credit as a tool to build your score — not to fall back into the debt trap.
Related Articles
Learn more about what happens after debt review and how the clearance process works:
- Life After Debt Review — What to Expect — your complete guide to financial freedom after completing debt review.
- Debt Review Clearance Certificate (Form 19) — everything you need to know about obtaining your clearance certificate and what happens next.
Frequently Asked Questions
Does debt review destroy my credit score?
No. Debt review places a flag on your credit profile that prevents new credit, but it does not destroy your score. In fact, debt review protects your score from far more damaging events like court judgments, repossessions, and garnishee orders. Your consistent monthly payments during debt review are also recorded positively by credit bureaus.
How long does the debt review flag stay on my credit report?
The debt review flag remains on your credit profile for the entire duration of your debt review process. Once you receive your clearance certificate (Form 19), your debt counsellor sends it to all four credit bureaus and the flag is removed within 7 to 21 business days.
Can I apply for credit while under debt review?
No. The debt review flag prevents you from taking on any new credit during the process. This is actually a protective measure — it stops you from accumulating more debt while you are repaying your existing obligations. Once you receive your clearance certificate and the flag is removed, you can apply for credit again.
How long does it take to rebuild my credit score after debt review?
Most people see meaningful improvement within 6 to 12 months of receiving their clearance certificate, provided they build positive credit behaviour. A good credit score can typically be achieved within 12 to 24 months. The key factors are paying on time, keeping credit utilisation low, and avoiding unnecessary new debt.
Is it better to go under debt review or to default on my debts?
Debt review is significantly better for your credit profile than defaulting. Defaults lead to court judgments, blacklisting, repossessions, and garnishee orders — all of which remain on your credit report for years and are far more damaging than a debt review flag. The flag is removed as soon as you complete the process and receive your clearance certificate.
