03 Apr A Glossary of ITC Clearance Terminology
So you know what ITC clearance is, what now? A lot of people don’t understand the vocabulary used when they read or talk about clearance with creditors or debt counsellors. Hence, we’ve put together a comprehensive list of the key terms you should know when discussing ITC clearance after Debt Review. Read on for an easy-to-understand and detailed description of each word, organised alphabetically.
Credit
Credit is the money you borrow from lenders to purchase goods or services with the promise to pay it back in the future, usually with interest. Interest is the amount creditors ask for in exchange for their services, and can be compounded or fixed. It’s usually expressed as a percentage.
Credit bureau
A company or group of people that collect information about your credit habits: things like whether you pay back what you owe, whether you pay on time, how much you borrow, the frequency of your borrowing, the types of credit checks you perform, and how often you do this.
Credit record
Your credit record is the history of what you do with credit, including loans, credit cards, and other lines of credit. This information is used to create your credit report.
Creditor
A person or institution that loans you money or provides you with goods or services on credit. Examples include banks, credit card companies, and stores that offer financing options.
Debt
Money that you owe to someone else. Debt can be good (like a mortgage to buy a house) or bad (credit card debt with high-interest rates).
Debt counselling
A professional service that helps people who are struggling with debt to manage their finances and create a plan to repay their debts, usually in the context of Debt Review.
Debt flag
A marker on your credit report that indicates you are currently under debt review. This may affect your ability to obtain new credit.
Debt Review
A formal process in conjunction with a debt counsellor that consolidates your debt into one monthly payment. Your debt counsellor negotiates with creditors and collection agencies for lower interest rates and reduced payments.
Interest rate
The cost of borrowing money expressed as a percentage of the loan amount. The higher the interest rate, the more you will pay in total for the loan.
ITC clearance
The process of submitting your certificate of debt repayment to credit bureaus, particularly Transunion (formerly ITC) to expunge debt flags from your credit record.
NCR (National Credit Regulator)
A regulatory body in South Africa that oversees the credit industry and protects consumers’ rights.
You now have a full glossary of the key terms you should know when dealing with ITC and the clearance process! Feel free to contact us should you have any questions regarding ITC clearance. We’re here to help!