If you do not provide your consent to a lender to inquire on your credit history with the credit bureau, you may be denied the credit facility for which you are applying. However, the lender may choose to conduct its due diligence on your application for credit using other means. In so doing, your application for credit may take more time to be approved and you may also not benefit from the best interest rates and terms. A lender may also choose to decline your application if it could not gather sufficient information regarding your credit history using alternate means.
Your credit report will be made available to a lender only when you have provided signed consent to that lender to access your report. The lender is required to obtain signed consent from you in support of anapplication for credit. The credit report is generated from a secure system to which the lender has secured access. If you are concerned that your report has been accessed without your consent, you could request from the credit bureau a list of all lenders who have accessed your report.
Credit reporting is a system of collating information from various sources, such as: banks, credit unions,other credit providers and government agencies, on an individual’s credit history. This information is made available to lenders with the consent of borrowers to allow lenders to determine their credit worthiness.Credit reporting enables lenders to make responsible decisions in relation to who is granted credit and theterms under which it is offered. The information obtained through credit reporting therefore, helps lenders to reduce the risks and costs of lending.
The purpose of the credit bureau is to collate information on your borrowing behaviour to create a “credithistory”. The credit bureau collects information from financial institutions and other credit providers inaddition to a wide range of publicly available information such as court judgments and bankruptcy notices,which is compiled into a credit report. The credit bureau will be allowed to collect information from credit providers such as: banks, insurance companies, mortgage companies, credit unions, telecommunications companies, utility companies, and even public sources like courts, civil records offices, etc. Over time, as it builds up a database with historical information, the credit bureau will produce other tools such as a credit score, fraud prevention and identity theft prevention tools for the benefit of the borrower and creditor.
When your application for credit is being assessed, lenders will contact all the references you have provided and perform credit checks with your previous lenders to see if you have been a responsible borrower. However, a new law will be passed in the Eastern Caribbean Currency Union (ECCU) which will allow for the establishment of a credit bureau to provide financial institutions and other types of credit granting institutions, access to your credit history in the form of a credit report.
Some actions that you can take to improve your credit include:
Managing your credit means paying back the creditor any amount owed, plus the interest or any other charges in the time period agreed. It is important to manage your credit to ensure that:
Credit is money that an individual borrows or a service or a product that an individual buys without making a payment up front. Banks, credit unions and other financial institutions may offer credit in the form of aloan. Other forms of credit include your cell phone charges, telephone charges, utilities charges and hire purchase account balance which you pay at the end of the month or billing cycle.
An investor may obtain additional information about the Regional Government Securities Market through the Fiscal Agent (ECCB), Treasury Department of the respective government, the intermediaries established in the market as well as Eastern Caribbean Securities Exchange website, www.ecseonline.com
Regulation of the activities of the issuers (Governments) is the responsibility of the Regional Debt Coordinating Committee (RDCC) which comprises the Financial Secretaries/Directors in the Ministries of Finance of each member country. The Governor of the ECCB, or his designate, is an ex-officio member of this Committee.
The variety of issues (i.e. 91 day T-bills, 1-year, 5-year, and 10-year bonds) allows the investor to satisfy short, medium, and long-term investment objectives. An investor may look to the RGSM if seeking an investment vehicle to help with the purchase of a home or automobile in the near future, or tuition for the children when they go to school, or to supplement a retirement plan.
If the bid is successful the investor must pay the principal cost of the bond or discounted cost of T-Bill, plus the commission to the broker. The commission charged will vary by broker, as each broker calculates the commission according to their requirement. Please seek advice from one of the licensed brokers to determine the commission charge. If the bid is not successful then there are no fees incurred by the potential investor.
In bringing an issue of securities to the market, the Government is required to disclose certain information to the market. This information provides prospective investors with insight into the fiscal performance of the government and the economic performance of the country, which enables them to make an informed investment decision. An investor's assessment of a government should include an examination of the country's level of outstanding debt in particular, outstanding debt to GDP and debt interest payments to current Government revenue. Such ratios and data provide some indication of the country's ability to meet current and future debt as well as interest payments.
When submitting applications for an issue of securities, investors must provide the intermediaries acting on their behalf. With bank details such as the name and address of bank, bank account number for which they want their principal and interest payments deposited. (editor's note: provide also for payment by cheque to holders).
On maturity date, each investor will be paid an amount equal to the face value (principal and interest) in respect of their holdings of the specific security.
Treasury bills are sold at a discount and are redeemed at face value at maturity, your return is the difference between the purchase price and the face value, assuming you hold the bill until maturity.
Notes and Bonds may be sold at discount or at premium. As with Treasury Bills, when the security is sold at a discount, the purchaser pays less than the face value. Holders of notes and bonds receive periodic interest payments (coupons) usually on a semi-annual basis. The annual return on notes and bonds is equal to the face value of the securities times the coupon interest rate.