Answers to your questions about credit reporting in the ECCU
Why is a credit bureau important to me?
The purpose of the credit bureau is to collate information on your borrowing behaviour 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. to create a credit history.
Before the creation of the credit bureau, banks and other lenders had to make contact with all the references provided in an individual’s or business’ application for credit and perform credit checks with previous lenders to see if that individual or business was a responsible borrower.
The establishment of a credit bureau to provide financial institutions and other types of credit granting institutions access to an individual’s or business’ credit history makes credit information sharing much easier.
Lending institutions get timely access to information that assists with assessing the risks of potential borrowers. As a result of the reduction of uncertainty regarding potential borrowers, credit providers can price lending more effectively.
As a borrower, the availability of a full credit history improves your access to credit while discouraging discriminatory lending practices and reducing default rates.
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.
What is in my credit report?
The credit bureau provides your credit history in the form of a credit report.
That credit history is a summary of the lending relationship between a consumer and a creditor or provider of a goods and services on credit. It generally contains identification information (name, address, national identification number), account information (name of creditor, date a loan was given, type of loan, amount of loan), payment information (monthly payment, original and current balance, on-time/late payments), and arrears information, if any. A credit history provides a reliable indication to a creditor of whether you as an applicant will pay your credit obligation.
Who provides the credit bureau with information on my credit history?
Financial institutions such as banks and other licensed financial institutions, money services businesses, credit unions or similar co-operative institutions, insurance companies and microfinance institutions, hire purchase companies, telecommunication providers, electricity service providers, water and sewage companies and development banks provide the credit bureau with your information.
Why do companies I have no loans with provide information about my credit history?
Not every borrower may have a loan from a bank or other financial institution so they will not be able to provide a formal credit history. However, most persons are likely to have taken credit in other forms, for example, through utilities, telephone or hire purchase services. Payment of bills for these services is also an indicator of a borrower’s payment behaviour and can therefore be used to build a credit history. Allowing the credit bureau to collect data from telecommunications and utility companies allows potential borrowers who do not have access to formal credit to show creditors that they are responsible in meeting other payment obligations in a timely and consistent manner and can therefore be potentially good borrowers.
Who has access to my credit reports?
Persons who can access your credit report from the credit bureau are those with a permissible purpose under the Credit Reporting Act. They include those to whom you are applying for credit or acting as a guarantor for someone seeking credit, landlords to whom you are applying for a lease, insurers to whom you are applying for insurance and certain employers that are recruiting for positions that entail financial responsibility. As a borrower, you will also have access to your credit reports from the credit bureau without cost once a year. You are also entitled to a copy of the credit report without cost should a lender decline your application for a loan based on negative information in your credit report. In all other cases, you can pay to obtain a copy of your credit report from the credit bureau.
How does a lender access my credit report?
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 an application 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.
What happens if I deny a lender access to my credit report?
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 cannot gather sufficient information regarding your credit history using those alternate means.
How can I query challenge information in my credit report?
You must provide a written note of dispute to the credit bureau. The credit bureau will be required to investigate the disputed information, seek clarification from the provider of the disputed information and take any necessary steps to correct the information.
If the credit bureau determines that the information in the credit report is accurate or if the credit bureau makes a change to the information that you are not satisfied with, you could request that a statement of claim stating that the information is not correct be attached to your credit history file for future users of your credit history.
If you are not satisfied with the decision of the credit bureau you may file an application for review with the Secretary of the Review Commission appointed by the Minister of Finance, which will independently review your case and make a decision on the matter.
I’ve had problems repaying credit in the past. Will this affect my ability to get credit or the rates at which I get credit, indefinitely?
The Credit Reporting Act seeks to give every borrower a fair chance to build a good credit history and be able to access credit under fair conditions.
A credit bureau cannot report information on a credit for a period longer than seven years after the date of termination or settlement of such credit.
How can I improve my credit?
Some actions that you can take to improve your credit include:
- pay your loans and bills on time (telephone, cable, loans, utilities and hire purchase accounts);
- apply for credit only if you could meet the repayment obligation and the credit is really needed; using credit cards wisely - keep balances low and meet minimum payments on time
- communicate with your lender to renegotiate terms of repayment or to refinance your obligation, if you encounter difficulties in meeting your payment obligations.
It is important to pay creditors any amount owed, plus the interest or any other charges in the time period agreed.
Is my credit information protected?
Yes, under the Credit Reporting Act passed by each ECCU member territory to facilitate the operation of the credit bureau, each person involved in the credit information sharing system, including the credit bureau, the providers of information (banks, telecommunication companies, hire purchase companies, utilities, etc.) and the users of this information, is required to take the necessary steps to protect and preserve the confidentiality of the information shared.
This means they will be required to implement the policies and procedures and necessary technology and staff to safeguard the data. Any failure to comply with the law will result in penalties.
Your consent is also required before your report can be disseminated to any entity, which also serves as further protection.
Where is the credit bureau located?
The credit bureau operates in all ECCU territories – Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines, with offices in each territory to provide services to the public including: providing borrowers with copies of their credit reports and dealing with queries that lenders or borrowers may have.