Check your credit history: It’s easy to do and you can amend any mistakes

With the Irish Credit Bureau no more, the credit register operated by the Central Bank has become the only source for checking a borrower's credit history.

For those whose finances have been affected by the Covid-19 pandemic, or others who have never done so, the move may be an opportune time to apply for a copy of their credit history to ensure that what’s being recorded is up to date and accurate.

Closure of the old system

The Irish Credit Bureau was founded in 1963. Its future has been uncertain for some time, given the establishment of the Central Bank's central credit register in 2017. The only surprise perhaps is that the two have managed to co-exist for so long.

For almost 60 years, the bureau was the only credit source in the State. It is owned by a group of current and former Irish lenders – including AIB, Bank of Ireland, Fexco and Ulster Bank, while entities linked to a number of former lenders in the market, including Anglo Irish Bank and Irish Nationwide Building Society, GE and ACCBank, also retain holdings.

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The company was the subject of a failed sale process in 2010, at a time when its shareholders were looking for €100 million for the business. It received another bid approach last year, according to its latest report. That was said to have valued the business at about €4 million but also did not lead to a deal.

Now, however, the bureau is no more, having announced back in October that it had ceased its credit reference business. It has started deleting all its records from November 1st, to comply with data protection rules.

It’s a natural progression, perhaps, given the flow of business that has gone to the Central Bank’s register, as the regulator has ramped up coverage.

Mary Leonard, chief executive of the bureau, said in July that more of its members had started to rely on data from this source to support their lending decisions, instead of the bureau's service.

Central Bank register

So what’s the bank’s central credit register and does it differ from its counterpart?

The register, operated by the Central Bank under the Credit Reporting Act 2013, keeps a record of all loans of €500 or more. Lenders are obliged to check the register when lending sums of €2,000 or more.

Data on loans is updated each month in respect of new loans, repayments, restructures and so on, while information regarding credit applications is also reflected on the register when the lender checks it, so this is ongoing throughout the month.

Lenders are obliged to check the register when lending, but they are not obliged to base their lending decision on the register alone. Lenders may also obtain your credit report if you have asked for a restructure of an existing loan, if there are arrears on an existing loan; or if you have breached the limit on a credit card or overdraft.

What’s important to note, however, is that the central credit register is not like credit agencies in other countries, which produce a credit score or rating for consumers.

In the UK, for example, credit reports include information on court judgments, bankruptcies or insolvencies, while in the US your credit score is also dependent on your bill-payment history. If you fall behind on your electricity, or your rent, prospective lenders will be aware of this.

In Ireland, the register is simply a repository of factual, impartial information, which lenders can use to help inform their lending decisions.

This is because the register came about not just as a means of informing lenders on the decisions they make, but to keep track of overall lending trends in the economy, and to help the regulator better supervise financial institutions.

It arose in the aftermath of the financial crash, as a means of enabling the Central Bank to be able to better see the level of exposure each individual lending institution had, to what and to whom.

What does it show?

Information on a consumer’s lending history is shown for up to five years. While a loan is still active (one where payments are still being made, or are expected to be made), lenders will see the most recent 24 months of payment information on the credit report provided to them.

Lenders are also provided with a “historical analysis”, which provides the highest values in certain fields for the preceding 60 months if applicable, according to the Central Bank.

When a loan has been closed – that is, where all payments have been discharged, or the loan closed off or written off by the lender – the lender will continue to see the most recent two years of payment information. The information will start to delete when the oldest information is five years old and will be completely removed from the credit report five years after the most recent transaction – usually the last payment – has been made.

Notable omissions

When it first launched, back in 2017, the register was criticised for its many omissions, including local authority loans, moneylending loans, and hire purchase and personal contract plan loans. However, since 2019, all of these are now included.

Nonetheless, despite the advances made in data collecting by the register, there are still a number of notable omissions. These include utility bills, pawnbrokers and outstanding tax liabilities, as well as information on bankruptcy in its various forms, such as personal insolvency arrangement or a debt settlement arrangement, as data from the Courts Service of Ireland and the Insolvency Service of Ireland are not included in the register.

While lenders are obliged to submit information on active loans to the register (including number of payments past due), a spokeswoman for the regulator says there is no obligation to include the legal status of a borrower in terms of bankruptcy or insolvency, and there are no plans to include such data at this time.

Neither will court debt judgments, tax defaulters or those who have fallen behind on their tax bills or who have failed to pay their property tax bill with Revenue find those details appearing on the register.

And if you’ve failed to pay your gas bill or your rent, or defaulted on a mobile phone contract, this information won’t be disclosed either.

For business loans, the old bureau allowed lenders to look up the credit history of individual directors and shareholders when a business was applying for a loan; the new register, however, does not. As the spokeswoman noted, the legislation that provided for the establishment of the register permits lenders to inquire on “credit information subjects” only – and if it is a business, and not an individual applying for a loan, then no search on individuals can be carried out.

Covid and credit checks

Throughout the Covid-19 pandemic, many people took payment breaks on loans or mortgages due to a fall in earnings and a reliance on the pandemic unemployment payment (PUP). For this cohort, it may be worthwhile checking how their lender has interpreted these payment breaks, to ensure that their credit record isn't unduly affected.

According to the Central Bank, when lenders agree a payment break, they should not report any missed payments or payments past due in the credit report, or report the loan as being restructured during the payment break.

This doesn’t mean that other lenders won’t be aware of any payment breaks you have taken out, however, even though the payment break won’t be recorded on the report – or at least shouldn’t be.

This is because, in a typical loan, the “outstanding balance” on the credit report would fall each month; with a payment break, however, it will stay the same, making it possible for a lender to infer that a payment break was probably in operation.

HOW TO REQUEST YOUR CREDIT REPORT

It's easy enough to request a copy of your credit history. It can be done at centralcreditregister.ie/borrower-area/apply-for-your-credit-report-and-other-rights/.

The main piece of data you will need is your PPS number, but you will also need to show three pieces of identification for the process: identity (copy of passport or driving licence), proof of PPS number and proof of address.

You will also need to print out your application form, sign it and upload it once more.

The service is relatively quick; according to the latest standard report for the register, 98 per cent of people looking for a report received it within five days during the first six months of the year.

There is no charge for checking your credit report, and it’s something many people do. According to the latest Central Credit Register service standards performance report published in July, 12,669 people requested such a report in the first six months of the year, while 368 people requested an amendment to their record and 112 looked for an explanatory statement.

Once you check your report, you can request an amendment. The credit register also gives you the opportunity to insert a note, or explanatory statement, relating to a specific loan or loan application. This may help another lender understand circumstances that might not otherwise be clear in the register.

You can also notify the Central Bank of suspected impersonation on your credit report. This means that if a lender is to look at your report, they will see that the details may be doubtful due to a suspected impersonation.

Finally, you also have the opportunity to request an amendment, if something is inaccurate, incomplete or not up to date in your personal information.

Your report will also show you who has been querying your credit history; these are shown as “footprints” at the end of your report. This footprint records the date, the lender name and the reason why that particular lender sought the credit report.