Does a loan written off mean that the debt is forgiven?

Does a loan written off mean that the debt is forgiven?

Last week I was having a conversation with Dan(not his real name) regarding the Credit reference(CRB) status. He had taken a loan five years ago which he did not manage to clear for one reason or the other. The Bank had eventually written off the loan balance and the CRB report actually reflected that. Dan could not understand the reason why if the debt was ‘forgiven’ why is he listed negatively?

I clarified the following to Dan:

  1. When a loan is written off, it does not mean the same is forgotten hence financial institution debt recovery units still follows up on the repayment.
  2. A written off loan is regarded as a character issue which means one cannot be trusted with loans due to the likelihood of defaulting.
  3. The written off loan makes the credit score so low and most financial institutions shy away from granting a loan.
  4. One is regarded as a risky customer.

After the explanation he asked me ‘’now that I am earning some revenue what can I do to improve on my credit score?’’

I explained to Dan the various options that were available to him to improve on the credit score and I’m happy to note that he has embarked on one of the options which I believe in the next three months his credit scoring would have improved a lot.

Are you looking for a loan but struggling with negative listing and you would like to change the narrative? DM

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