Personal Finance Apprentice

The Credit Information Corporation and You

The Credit Information Corporation and You: here's a Q-and-A style run down of what we can expect.

The Credit Information Corporation and You

The Credit Information Corporation and You:  here's a Q-and-A style run down of what we can expect.

Last time, we tackled the establishment of the Credit Information Corporation, and what having an individual credit rating means for ordinary folks like us.

So now that it’s here, here’s a Q-and-A style run down of what we can expect.

When will this start?

In about two years (2016). The CiC probably has a definite date in mind, but as far as I know, no hard, specific date has been made public yet.

Will they dig up all my financial “dirt”?

Yes, but only the data five years prior to the “start”. So that’s 2011 and onwards.

Where will they get data from?

From their website: “banks, financial institutions, insurance companies, financing companies, credit cooperatives, as well as utility companies and other businesses that extend loans.”

Who can see that data?

You – and anyone you allow to view it. Anyone can request to see your credit score, but you’d have to give your permission for them to see it.

Is it free?

You can view your own data for free once a year.

All other times, you (and everyone else who requests) will have to pay (along with getting your permission, as mentioned above).

The Credit Information Corporation and You:  here's a Q-and-A style run down of what we can expect.

Who would typically want to see your data aside from you?

The most obvious one is your bank, if you’re getting a loan. In the same vein, a property developer might want to if you’re getting “in-house” financing.

Micro-lenders (Lenddo, and the like) can do so, but may not really want or need to.

Potential employers may want to. It’s unlikely, but not totally impossible and is something that happens in other countries. It may be because the position requires handling money, or they’re just looking for clues on how responsible you are. It’s a rather controversial practice, and there’s no reason to think it’s going to happen here. But it helps to be aware.

Does this mean I’ll be able to get lower interest?

Probably not (at least when comparing interest rates before and after the CiC ).

People with bad credit history would likely have to pay higher rates. Theoretically, lenders may offer lower rates to attract “good payers” and lessen risks on their part. But in the end, it’s a business and they’re not inclined to give you what is essentially a discount just because you’ve been responsible.

Ok, so my credit information is bad, what do I do?

Basically, you’ll just have to be more responsible. Usually this means settling your overdue payments or other liabilities.

Aside form that, it’s mostly about showing that you’re a good payer. Making on-time and complete payments to post-paid accounts (utilities, telcos) and your credit card is a good way to do so. The CiC may also be able to give some steps to fix your credit information.

Of course, there are times when your credit information is bad because the information is inaccurate.

If my credit information is inaccurate, what do I do?

You’ll be able to dispute the data with the CiC. The process is still being refined, but you’ll most likely be asked to provide documentation for your claim (like a receipt or some other acknowledgement).

How long would that take? And how much?

It’s free, but “how long” may depend on the circumstances. A simple error may take just 5 days (you’ve paid off the loan and have the documentation to prove it).

If there’s some form of dispute, it may take longer (like, your cable company forgot to terminate your account when you told them to and so might have to do some back tracking and data updating).

At worst, if there’s contradictory data, it may have to go to court (you have proof you paid, they have proof you haven’t).

Can someone can fix my credit information  for me, because I read something like that on a website/blog/forum/facebook/twitter/spam/ad?

Beware of scams. But theoretically, they can. How would that work?

They’ll pay to see your data (with your permission), analyze what’s wrong, tell you (most probably) to pay off loans, and then charge you for their “service”.

That’s the legit version.What would scammers do?

They’ll pay to see your data (with your permission), analyze what’s wrong, dispute anything and everything that is negative so the data is masked (temporarily hidden until the dispute is resolved). You’ll get a better looking credit information, and pay them for their “service”.

Either way, it’s more efficient if you just do it yourself. (Also, some bureaus mask data, others don’t; no word yet on whether ours’ will or will not).

Awesome, I’m all set! Wait the government is in charge of this? How can we be sure they’ll do a good job? (ok, you got me. that’s my own – rather harsh – question)

There’s going to be a process to reconcile double entries of identities, various addresses, and other similarities. They’ll use as many data sources as possible to enable them to make such a complex analysis.

That said, it’s your data and future on the line. So when the time comes, get your free report and take a good long look at it. It’s better to fix things early rather than wait until you need it.

(The “answers” were sourced from the CiC and their website. Much thanks to Salve Duplito of ANC on The Money for getting me in touch with them.)

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photo credit: LendingMemo via photopin cc, thetoybrickco via photopin

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