What debt review does to your credit score and why it can still help

Entering debt review will lower a consumer’s credit score, but experts say it can be preferable to continuing to miss payments while over-indebted. The process is designed to stabilise finances and prevents consumers from taking on additional credit while they restructure their obligations.

Why the score falls when you enter debt review

The Gawie le Roux Institute of Law explains that “debt review will be flagged on your credit report for the entire process, significantly lowering your credit score.” Experts quoted in the source material say the drop happens in part because payments are not made directly to creditors during the initial two months of the debt review process.

Benay Sager, executive head of DebtBusters, said the early fall in score is linked to that payment arrangement but argued it may be less damaging than continuing to miss payments while remaining over-indebted. Sager said the initial score drop is not permanent and that, in his experience,

“if you stay the course, over time it does rectify,”

with regular payments potentially showing improvement after 12 to 18 months.

What happens to payment records and the debt-review flag

The National Credit Regulator (NCR) confirmed in a June 2025 guideline that credit providers must continue submitting payment records to credit bureaus during debt review. Rowan Breeds, director and debt counsellor at Debt Solutions 4U, said the debt-review status on a consumer’s credit profile becomes more significant than the score itself while the process is under way.

Breeds noted that payments made through the Payment Distribution Agency are reflected in the consumer’s payment profile, and that consistent payments under the restructured agreement build a record of meeting obligations. However, he cautioned that consumers should not expect their score itself to suddenly improve while still under debt review.

When a clearance certificate is issued, the NCR said only the debt review flag and default information that preceded or triggered the debt review are expunged; payment-profile history built during the process remains on record.

Score versus status: eligibility for further credit

Rene Moonsamy, director of the National Debt Counsellors, explained that consumers under debt review are generally no longer eligible to obtain further credit. She said the National Credit Act restricts a consumer who has applied for debt review from incurring further charges or entering new credit agreements while the process is under way.

Breeds summarised the practical effect:

“So, whether their score is 720, 699 or 550 is largely academic in the short term. The big picture is that they are under a formal debt-restructuring process.”

The bigger picture: why debt review can be the better option

Breeds urged consumers to consider the circumstances that led to debt review rather than focusing only on score movements. He said,

“Debt review can protect the consumer from the much more serious consequences of uncontrolled over-indebtedness.”

He added that the key question is whether current repayment obligations are sustainable, and that a credit score is a symptom while affordability is the underlying problem.

Sager made a similar point about weighing long-term interests:

“You’ve got to consider what’s in your best interest in the long term. To really suffer under the debt versus protecting a score.”

He also observed that scores often fall when consumers cannot make ends meet.

Consumer credit trends referenced

The source material cited FinMark Trust’s FinScope South Africa 2025 Consumer Survey, which showed the number of credit-active adults increased from 29.4 million in 2024 to 30.7 million in 2025, and that purchases of goods on credit rose from 18% to 24%.

What readers should take away

Debt review will affect how a credit score functions and will be visible on credit reports during the process. Consistent payments under a restructured agreement are recorded and matter, and, according to experts quoted in the source, staying in an unmanageable debt position can be more damaging than entering debt review.