How to remove a judgment from your credit record

A judgment on your credit record closes doors quietly. No home loan, no vehicle finance, sometimes no rental application and, in some sectors, no job.

People therefore pay judgments off and assume the record clears. Very often it does not, and the reason is a single administrative step that somebody else was supposed to take.

The rule that is supposed to fix it automatically

Section 71A of the National Credit Act 34 of 2005 requires a credit provider that receives payment in full of an amount owing under a judgment debt to notify the registered credit bureaus, so that the adverse information relating to that judgment is removed.

The provider must do this within seven days of receiving the payment.

Two things follow that people get wrong in opposite directions.

You do not have to apply. Removal of a paid-up judgment is not a favour you request. It is the credit provider's duty.

It still frequently does not happen. Files close, staff change, the debt was sold to a collection agency two owners ago, and nobody sends the notification. The duty being clear does not make the listing disappear.

So the practical rule is: rely on the duty, and verify that it was performed.

Get the paid-up letter at the time

This is the single most useful thing on this page, and it costs nothing if you do it at the right moment.

When you make the final payment, ask in writing for a paid-up letter or a certificate of balance confirming that the judgment debt has been settled in full, with the case number, the court, the date of settlement and the amount.

Obtaining that document on the day you pay takes one email. Obtaining it four years later, from a creditor that no longer exists or a collection agency that has lost the file, can take months and sometimes cannot be done at all.

If the automatic removal happens, you never need it. If it does not, it is the entire basis of your dispute.

How long a judgment stays if nothing is done

Adverse information is not kept indefinitely. Under the credit bureau regulations, a civil court judgment falls off a consumer's profile at the earlier of:

• the maximum retention period prescribed by the regulations, which for a civil judgment is five years
• rescission of the judgment by a court
• abandonment of the judgment by the credit provider
• removal following payment in full under section 71A

Which means two things. Waiting works eventually. And waiting is a bad plan, because five years is a long time to be shut out of credit for a debt you have already paid.

The three different outcomes

People use "remove the judgment" to mean three quite different things, and the strength of each differs.

Removal after payment. The judgment was validly granted, you paid it, and the listing comes off under section 71A. The judgment itself is a matter of court record; what is removed is the adverse credit information.

Rescission. The judgment is set aside by the court, as though it had never been granted. This is the strongest outcome and it is available where the judgment was taken by default and you have a proper basis: you were never served, you were not in wilful default, or the debt was not owed. Our guide on rescinding a default judgment sets out the grounds and the time limits.

Abandonment. The credit provider abandons the judgment, which also results in removal. This is sometimes negotiated as part of a settlement, and it is worth asking for expressly rather than assuming payment alone will produce it.

If you have a real basis for rescission, pursue that rather than simply paying, because a rescinded judgment leaves nothing behind.

Disputing a listing

Where the judgment has been paid and the listing is still there, you dispute it with the bureaus.

Get your credit reports. From each of the registered bureaus, not just one, because they hold separate databases and a listing removed at one may persist at another. You are entitled to a free report annually.

Lodge a dispute with each bureau showing the listing, quoting the reference, and attaching the paid-up letter.

The bureau must investigate. It is obliged to consider the dispute, and where the information cannot be substantiated it must be removed. While the dispute is being investigated the listing should be flagged as disputed.

Follow up in writing and keep the reference numbers. The paper trail is what you take to the next step.

Then the National Credit Regulator or the Credit Ombud. Where a bureau or a credit provider will not do what the Act requires, the complaint goes to the regulator or to the relevant ombud scheme, at no cost to you.

Our guide on disputing a listing on your credit report sets out the dispute mechanics in more detail, including listings that are not judgments.

Beware of paying to have records "cleared"

There is a paid industry around this, and it is worth being direct about it.

Nobody can remove a judgment that is validly granted and unpaid. The routes are payment, rescission, abandonment or the passage of the retention period. A service that promises to delete a valid listing is either doing something you could do yourself with a paid-up letter and a free dispute, or promising something that cannot lawfully be done.

Two specific warnings.

Do not pay somebody to lodge a dispute you can lodge yourself for nothing.

Be careful about paying or acknowledging an old debt that never went to judgment. A judgment debt runs for 30 years, so it will rarely have prescribed, but an old account that was never taken to court may have prescribed after three years. A payment or acknowledgement made before the three years are up restarts them. Made afterwards, it does not revive the debt, but the money cannot be reclaimed and a collector may argue that you gave up the prescription defence, which is the opposite of what you want. Check first. Our guides on checking whether a debt has prescribed and what happens when a debt prescribes set out the test, and the prescription checker works through the dates.

That last point is the most expensive mistake in this area. Somebody with an eight-year-old account that was never taken to court, anxious about their record, pays a small amount as a gesture of good faith, cannot get it back, and hands the collector an argument against a defence that would have ended the matter.

If you did not know about the judgment

This is common, and it changes the approach entirely.

Judgments are frequently taken by default on summonses served at addresses people had long left. If the first you heard of it was a declined credit application, do not simply pay it.

Get the court file. The case number on your credit report tells you which court. Ask for the summons, the return of service and the judgment.

Look at how it was served. Service at an address you had vacated, or on somebody who was not you, is the basis of a rescission application.

Check the amount. Default judgments sometimes include costs and interest that have compounded well beyond anything recognisable, and the in duplum rule caps arrear interest. Our debt interest and in duplum calculator works it out.

Then decide. Rescission is more work than payment and leaves you in a better position. Where the debt is genuinely owed and small, payment plus a paid-up letter may be the proportionate answer.

Worked example

This example is illustrative. A woman is declined for a home loan and discovers a judgment from six years ago for R14 000 on a clothing account, which she paid off in full four years ago through a collection agency.

The listing should already be gone. The provider was required to notify the bureaus within seven days of receiving payment in full, and did not.

She has no paid-up letter, because nobody suggested she ask for one and the payments came off her bank account in instalments.

So she reconstructs it. She pulls four years of bank statements showing the debits to the agency, adds them up against the judgment amount, and writes to the agency asking for a paid-up letter quoting the case number. The agency, which has since changed hands, takes six weeks to produce it.

She then obtains her report from each bureau, lodges a dispute at each with the letter attached, keeps the reference numbers, and follows up at three weeks. Two bureaus remove it. The third does not respond, and she complains to the regulator, attaching the dispute reference and the paid-up letter.

It takes about four months in total.

Had she asked for the paid-up letter on the day she made the final payment, the whole exercise would have been one email and two dispute forms, and she would probably have discovered the problem years before a bank did.