What Happens When You Get Blacklisted by Banks?

What Happens When You Get Blacklisted by Banks

Being blacklisted by banks is generally not a good thing.  It is the financial equivalent of being kicked out to pasture. You don’t really have anything much in common with other people who are blacklisted.

How it Happens – and What you may be able to do about it

It’s important to note that when someone says “you’re blacklisted” they usually mean that you’re unable to operate a bank account at all. As with everything in life there are degrees of blacklisting. A person can be blacklisted from operating an account for the next week, the next year or forever.

The most common reason for being blacklisted is because someone else has reported you as someone who cannot meet their financial obligations. The most common reason for someone else to report this is because they have taken you to court and failed. This is called a County Court Judgement (CCJ).

How can one get out of being blacklisted?

If you get blacklisted it is usually because someone else has taken you to court and failed. They take you to court for whatever reason (a disputed debt, damage to property, failure to pay child maintenance) and they get a judgement against you.

So what do you need? You need that judgment set aside.

You can’t get that judgment set aside by yourself. You need to get a solicitor who specialises in getting judgments set aside and has experience of doing it.

It can be done and it is not that expensive (about £300). Once the judgment is set aside, you’re off the blacklist and can open an account no problem.

How long does it take?

It can take up to six weeks however it never failed that I know of after taking one client through the process.

So if you’re blacklisted by your bank for whatever reason, get in touch with me here .

Let’s take a look at this blacklist thing – what happens when somebody is blacklisted by banks?

What happens when you get blacklisted by banks?

What happens when you get blacklisted by banks is that your name gets added to a central blacklist. This means that, in the United Kingdom at least, any financial institution (bank, building society, credit card company) will be prevented from allowing you to operate an account with them. This is not just credit cards either. A person can be blacklisted by banks from operating an account for the next week, the next year or forever.

What are Banks Blacklisting?

Essentially, when a bank gets wind of you being unable to meet your financial obligations they will put you on their blacklist. If that person has taken you to court and won, then this is the reason why you are getting blacklisted. This can happen for many reasons, but one of the most popular is that you have failed to pay your debts on time.  For example, if you have taken out a loan and simply not paid it back on time your bank will flag up any future applications as being high risk.

The bank considers you to be high risk for the simple reason that if they give you credit then you will use it and not pay it back on time, causing them problems. They want to reduce their exposure to this kind of problem, so they blacklist your name. You can then wave goodbye to any account offers, credit cards or anything that requires a credit check.

Why Banks Blacklist you?

The main reason for this is to reduce the bank’s exposure to risk. If they blacklist somebody who has failed to pay their debts on time, or somebody with bad credit history, then they reduce the chance of them losing money from these customers. In simple terms, if somebody can’t pay you back on time, and constantly causes problems with their debt, then they are a bad risk.

Who makes the decision to blacklist somebody?

The decision is made by the bank itself. If somebody has failed to pay their debts on time, such as an overdraft or credit card, then the bank will want to reduce its exposure to that individual. They must think carefully about this because they may be missing out on a lot of money, but their duty is to make sure they don’t lose any more money by giving you credit when you are unlikely to pay it back.

How Long does the Blacklisting last?

Blacklisting can last for an indefinite period. It could end in a week, it could last for two years. This will depend on each financial institution and their internal policies towards blacklisting customers.

How do I get Blacklisted?

The most common way to get blacklisted is through missing payments or failing to pay debts on time. The bank will usually issue warnings before blacklisting somebody, but sometimes they will blacklist somebody without any warnings. If you have been blacklisted, then it is likely that your bank has contacted you to warn you about your financial history.

Never pay off a loan early

If you are considering getting a loan and paying it back as quickly as possible in order to avoid the interest, I urge you not to. If you pay off a loan early, this will look as though you have been struggling with repaying it and will result in you being blacklisted.

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