Your Money: Introducing the credit register
An understanding of the Central Bank's register may be key to securing a loan
Credit checks are a common feature of applying for loans. Lenders want to make sure you are a good prospect if they're going to extend you a mortgage, car loan or credit card. For decades, they operated an inter-bank register (the ICB) where this information was stored, so they could cross-check it before agreeing that yes, you could probably be trusted to repay them.
They were on the lookout for missed payments, defaulted loans and any other indicators that you might be what they term a 'moral hazard'. Of course, for a few mad years, it turned out the banks were the moral hazard, ignoring their own lending rules and chucking cash at people to buy things they couldn't afford.
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Under the EU/IMF bailout conditions, the Central Bank of Ireland has taken over the credit register and broadened it to encompass more borrowers and credit institutions. This is long overdue and will help the Bank keep an eye on lending habits. This week, I'm looking at what it does, who it includes, and how you can find out what financial institutions know about you.
What is on the register?
As of June 30, 2017, banks, credit unions and any lenders providing consumer loans of €500 or more (including overdrafts and credit cards) must submit personal and credit information on those loans to the Central Credit Register. In March, the duty was extended to local authorities and money lenders and in June to hire purchase, PCP loans and business credit.
What type of information is recorded?
Basics like your name, address, date of birth and PPS number, for a start. This is to ensure the right loans are attached to the right people from different banks. Then, credit information such as the lender's name, loan amount, payment history and how much is still owing. It is kept on a rolling basis for five years and forms your credit report.
Who gets to access it?
Lenders must request a copy of your credit report when you apply for a loan of €2,000 or more, and have the option to apply for it for loans over €500. Only the past two years of 'performance information' will be seen by the lender. Every time someone asks about your credit history, they leave a record, or footprint, which records the date, lender and why they requested the report so it can't be abused.
Does the Central Bank decide my credit rating?
No. Nor does it decide whether a loan is approved or not; that's up to the lender because it's based on other criteria outside the credit rating. There's no score or grading given, it's simply factual information rather than a judgement.
What happens if I'm refused a loan?
You can ask for your credit report at any time. It's free.
You also have the right to add an 'explanatory statement' of up to 200 words about any information on the report, which is useful if there was a very genuine reason a missed repayment is recorded as it is.
You can also ask to have the information amended if it is inaccurate or incomplete, although you'll need the lender to agree.
Is the inter-bank register gone now?
No. It's still there and will run in tandem for a while under its more restrictive guise. In time, it's likely to cease.
How do I find out more?
Information on the credit register is available at centralcreditregister.ie, by lo-calling 1890 100 050 or phoning (01) 224 5500.
You can also email myrequest@centralcredit register.ie.