What It Means, How It Affects You, and What It Takes to Exit Successfully

For many South Africans overwhelmed by debt, debt review (also known as debt counselling) offers a structured and legally protected path toward financial recovery. But one of the most common concerns people have is: How does this process impact my credit profile, and what happens when I want to exit?

This guide explains everything you need to know about the short- and long-term effects of debt review on your credit standing, as well as the process and legal requirements for removing the “under debt review” status from your credit report.

What Is Debt Review?

Debt review was introduced in 2007 through the National Credit Act (NCA) to assist consumers who are unable to meet their monthly debt obligations. The process is overseen by a registered debt counsellor who:

• Assesses your financial situation,
• Declares you over-indebted if applicable,
• Works with your creditors to restructure your debt,
• Ensures legal protection from repossession and summonses, and
• Oversees a single, affordable monthly repayment plan.

While the process offers critical protection and financial relief, it does come with temporary restrictions—especially concerning your credit profile.

How Debt Review Affects Your Credit Profile

1. Your Credit Profile is Flagged

When you enter debt review, the National Credit Regulator (NCR) notifies credit bureaus that you are under debt review. This “debt review” flag is visible to all credit providers, who are legally prohibited from granting you new credit while the flag is in place.

This restriction exists to prevent further financial harm. It forces you to focus on repaying what you owe without taking on more credit—which often starts the cycle of over-indebtedness in the first place.

2. The Initial Drop in Credit Score

If your credit score was previously good, you may see a decline once you enter debt review—not because the flag itself reduces your score, but because your profile now shows you’re under financial strain and can’t access credit.

In most cases, however, your credit score is already low before starting the process due to missed payments, defaults, or legal action. Debt review doesn’t worsen this—it prevents it from deteriorating further by protecting you from judgments and helping you make consistent repayments.

3. Regular Payments Help Restore Trust

While the “under debt review” flag restricts new credit, consistent monthly payments made through the Payment Distribution Agent (PDA) reflect positively over time. They show you’re taking steps to manage your debt responsibly, which lays the foundation for improved credit standing in the future.

What Happens When You Complete Debt Review?

Successfully completing debt review means you’ve settled all restructured debts, or in some cases, all debts except for your bond or long-term credit agreements (if those payments are up to date).

At this point, your debt counsellor will issue a Clearance Certificate (Form 19).

This certificate:

• Confirms you’ve met all your obligations,
• Is submitted to the NCR and all credit bureaus, and
• Triggers the removal of the “under debt review” status from your credit profile.
• The credit bureaus are then legally required to remove the flag—usually within 21 business days.

What If the Debt Review Flag Doesn’t Disappear?

You have the right to request a copy of your credit report from major bureaus like TransUnion, Experian, or Compuscan (you’re entitled to one free report per year). If the flag hasn’t been removed after submitting your clearance certificate, follow up immediately—ideally with help from your debt counsellor or a legal professional.

Can You Exit Debt Review Before Completion?

Yes, but it’s complicated—and timing matters.

1. Before a Court Order Is Issued

If you’ve applied for debt review but haven’t yet received a court order confirming your over-indebtedness, you may withdraw. However, if your debt counsellor has already issued Form 17.2, notifying creditors and bureaus that you’re over-indebted, you cannot simply cancel the process without legal action.

In this case, you’ll need to approach the Magistrate’s Court and request that the court rejects the debt counsellor’s findings—effectively reversing the debt review status.

2. After a Court Order Is Granted

Once a debt review order has been made, there is no “cancellation” option. You can only exit under one of the following conditions:

• You have paid off all debts included in the court order.
• You have paid all short-term debts, and your long-term debts (e.g., bond) are up to date.
• Your debt counsellor will then issue the clearance certificate to remove the flag.

Exiting without meeting these conditions, even with Form 17.W (a withdrawal notice), does not remove the flag. Worse, it also strips you of legal protection from creditors, exposing you to repossession or judgments.

What Are the Consequences of Not Completing Debt Review?

Failing to complete the process can leave you worse off than before:

• Your credit profile remains flagged.
• Creditors can resume legal action.
• You may face higher interest rates or aggressive collection efforts.
• You lose all the protections offered under the NCA.

Many consumers exit prematurely thinking it will fast-track their ability to apply for new credit. In reality, it delays recovery and complicates your financial situation even more.

Rebuilding Your Credit Score After Debt Review

Once the debt review flag is removed, the real work begins: rebuilding your credit profile and financial reputation.

Here’s how to start fresh:

1. Check Your Credit Report

Ensure the debt review flag is gone and all payment records are accurate. Dispute any incorrect listings with the credit bureau.

2. Apply for Small, Manageable Credit

Consider opening:

• A retail account with a low limit,
• A secured credit card backed by a deposit, or
• A cellphone contract with a reasonable monthly cost.
• Use the credit responsibly and pay on time.

3. Pay Everything on Time—Every Time

Timely payments are the strongest indicator of creditworthiness. Missing even one payment can undo months of progress.

4. Keep Your Credit Utilisation Low

Use less than 30% of your credit limit. This shows lenders that you’re not reliant on credit to survive.

5. Avoid Applying for Multiple Accounts

Too many credit applications in a short time will hurt your score. Build slowly and responsibly.

With consistency and discipline, your score can improve significantly in 6 to 12 months, and even more over two years.

Final Thoughts: Debt Review Is a Reset, Not a Life Sentence

Debt review is not a financial trap—it’s a reset button.

Yes, it places restrictions on your credit access. But it gives you breathing room, protects your assets, shields you from legal action, and sets you on a path to becoming debt-free.

Once you complete the process and receive your clearance certificate, you’re free to start rebuilding—with no permanent black mark.

If you’re under debt review and ready to exit the process, we can help. Our legal and financial team can:

• Guide you through early removal (if applicable),
• Assist with obtaining and submitting your clearance certificate,
• Follow up with credit bureaus, and
• Help you rebuild your credit profile step by step.

Need Help Exiting Debt Review?

Contact us to book a confidential consultation and learn more about your options. We’ll walk you through the process—no guesswork, no hidden fees, just clarity.