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Credit Reporting: Your Questions Answered

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Written by Publishing Team

Credit reporting: Your questions answered

Authors):

Central Bank of Barbados


What is a credit report?

Your credit report includes a history of your credit and repayment patterns. To prepare this report, the credit bureau collects this information from any financial institution from which you have obtained a loan, or from any entity that sells items on credit or lease purchases. Your credit score assesses your ability to meet your financial obligations to the entity that provided you with items of credit and/or a rental purchase.

Why are credit reports submitted?

Credit has been reported in Barbados for many years. What the new Fair Credit Report Act will do is regulate and expand this activity.

Who is collecting my credit information?

Your information will be collected from financial institutions that provide credit, such as commercial banks, finance and credit companies, credit unions, as well as insurance companies.

It can also be collected from utility companies, companies that offer lease purchase, and other entities such as the Student Revolving Loan Scheme.

A more detailed list can be found in the law.

What information will be collected about me?

  • The credit bureau can collect a wide range of information about you:

  • Personal information (such as name, date of birth, and address)

  • The type and amount of a loan or similar type of credit, including purchase-by-lease, that you have with a financial institution or other entity

  • All your outstanding loans plus potential liabilities, such as pending lawsuits

  • The date you took out any loans and the terms of those loans, for example, loan principal, interest rates, and repayment schedule

  • Information about any assets you use as collateral for a loan or other type of credit

  • Your current and maximum loan balance

  • The status of any outstanding loans you have, including the last time you paid them

  • Any collateral you have agreed to provide (for example, if you act as a guarantor for someone else’s loan)

Should I give permission for my information to be collected and shared?

In some cases, you may be asked to give your consent. However, in other cases, your consent is included in the terms of the credit agreement you enter into with the credit information provider (for example, a financial institution, utility company, business).

The Company can also notify you that your information will be shared by posting a physical notice on its premises or by posting a notice on its website. In such cases, dealing with the entity concerned after the notification is considered as consent.

Do I have to give permission for a company to access my credit information?

Yes. However, a company or other entity may decide that your consent to their access to your information is a condition for them to provide credit to you.

Who will my information be shared with?

Anyone who uses the services of a credit bureau can receive a credit report, credit score, or other credit information about you.

This includes banks, credit unions, and other financial institutions, as well as companies offering rental purchases, potential landlords, and potential employers, if the position entails significant financial responsibilities.

Will I be notified when someone accesses my credit information?

No, you will not be notified when someone accesses your information. Remember, however, that entities cannot access your information without your consent.

What happens if I do not give my consent for my information to be collected or shared?

If you do not consent to your credit information being collected by or shared with an entity, that entity has the right not to enter into an agreement with you.

Can I access my credit report?

Yes. Each year, you are entitled to a free copy of your credit report upon request.

What happens if something is inaccurate on my credit report?

If your credit bureau information is incorrect, you can send a letter requesting that the error be corrected. The credit bureau must, within seven days of receiving your letter:

  • Check your claim and make any necessary corrections

  • We advise you to report the dispute to the Central Bank of Barbados

How can I be sure that information collected about me will be safe and not misused?

The credit bureau and all credit information providers must have appropriate systems, policies and procedures in place to protect your information from accidental loss, damage or damage. Any malicious breaches of the privacy of your data incur a penalty of 50,000 Bahraini Dinars.

How will a bad report affect my credit prospects?

The company can refuse to give you a loan if it considers you to be a bad credit risk.

Will a good credit score increase my chances of getting a loan or other type of credit?

Businesses and other entities can decide who they do business with or not with, but it is only natural that they would prefer to deal with customers who have a good track record of fulfilling their obligations, as these customers are considered to be less risky.

How can I get a good credit score?

The best way to build your credit score is to strive to meet your credit obligations as agreed and to speak immediately to your credit provider if you encounter challenges.

What counts as bad credit? If my bills are due in the middle of the month, but I pay at the end of the same month after payday, does that affect my credit rating?

The Fair Credit Reporting Act does not specify the specific factors that contribute to your credit score. As such, the various credit bureaus will determine which activities they consider in determining what is considered bad credit and how much they weigh.

Will different issues be weighted differently? Does paying a bill late count like not paying a bill?

Different credit bureaus will use different metrics and apply different weights to assess your creditworthiness.

How does something like a COVID moratorium count in terms of how my creditworthiness is viewed?

As financial institutions offered the moratorium during the COVID-19 pandemic, it is doubtful that a person who accepted the suspension would have any relevant non-payment reflected in their credit score.

How long will it take for bad credit to cancel my report?

According to the Fair Credit Reporting Act, credit bureaus can keep information about your credit activity for seven years after you pay off a loan or other debt.

How often will my credit report be updated?

Credit reporting is an ongoing activity, so every time you enter into a new credit arrangement or pay off an existing loan, it will be reflected in your credit report.

Did everyone start with a clean slate when the law goes into effect?

While the Fair Credit Reporting Act was only recently passed, there have been credit bureaus operating in Barbados for several years. It is therefore likely that these and other offices will use and rely on the credit information currently available to you in the future.

Can I refuse a loan, rent purchase, or access to a facility if I have a bad credit?

Yes. Companies and other entities can decide who they want to do business with, and they may choose not to do so with someone they consider a credit risk.

Can the company change the terms and conditions of an existing loan or agreement based on a credit report?

This is unlikely because the terms and conditions of existing agreements have already been set. However, your credit report may affect any potential future agreements you may enter into with the same or another company.

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