An adverse account is any credit account that negatively impacts your credit report. These often include high-risk lending products such as payday loans, overdue accounts, or those that have gone into default and been handed over to debt collection agencies.
Why Adverse Accounts Matter
When your account is sent to a debt collector, it shows credit bureaus and future lenders that you may have trouble paying back money and managing credit responsibly. This can lower your credit score. A low credit score makes it harder to get a loan, rent a home, or even get a job.
Steps to Take
If you have an adverse account, take action as soon as possible:
- Contact the creditor to understand the outstanding balance.
- Ask to set up a payment arrangement, allowing you to break up your total outstanding amount into manageable instalments
- Once paid off, request a paid-up letter or settlement letter to begin repairing your credit history.
Need Help?
Mdalisu’s Credit Ready Plan can support you in fixing your credit. Find out more
