The right credit helps build your credit profile. It is a way in which to purchase goods and
services, As an example, you could borrow money to pay for your studies and commit to pay
back the amount in the future.
However, on the flip side, credit can also leave you overindebted. As such, some consumers
find themselves borrowing money to help make ends meet. They use loan sharks and other
Furthermore, some consumers receive credit without having the correct checks done
beforehand. When they are unable to repay the loan, they end up in a vicious debt cycle.
So, what is the National Credit Act?
This act, aka the NCA or the ‘Act’, was put into effect in 2007. The main aim of the act is to
protect consumers, as well as promote social and economic welfare, and encourage a fair,
transparent, and responsible credit market. One of the ways that it does assist is by debt
counselling. The NCA created a framework for companies that deal with debt management in
order to help consumers to take charge of their overwhelming debt. They hire debt counsellors,
all of whom have qualified with the NCR, to assist consumers with their credit agreements.
Debt counselling, briefly
Debt counselling is a process where your assigned debt counsellor will act on your behalf with
your lenders. As such, they will renegotiate your credit terms so that you pay a smaller amount
each month, and over a longer period of time.
The NCA also assists by helping to stop reckless lending. So, before a lender can give anyone
credit, they have to first determine if the borrower can afford to pay back the debt. They do
this by looking at your credit score as well as how much money you earn each month. If the
lender does not do this, it is called reckless lending and they can face strict consequences.
All in all, the NCA aims to protect you. As such, these include your rights as a lender.
Furthermore, it also ensures that both lenders and credit bureaus treat you fairly. And lastly,
the NCA also offers a debt counselling framework to provide support to you if you are unable to
meet your obligations and you become overindebted.
Speak to One Debt today if you need more information about the NCA ad debt counselling.