Banks and other lenders generally send information about borrowers to a central database that is operated by a credit reference agency or credit register. This information includes what credit agreements you have made and your history of repaying them. It is used to generate a credit rating or credit score, which indicates whether your credit repayment record is good or poor.
The database is available for lenders to consult to see if potential borrowers have ever defaulted on loans. The aim of the system is to help lenders to assess the ability of borrowers to repay any future debts.
The Credit Reporting Act 2013 came into effect on 27 January 2014. It provides for the establishment and operation of a statutory Central Credit Register (CCR) system. Credit providers will be required to report a comprehensive range of credit information. They will be obliged to check with the Register for all applications for credit above €2,000 in value. Consumers will be entitled to get one free copy of their record every 12 months. Read more about the Act in this press release.
The Central Credit Register will be established and operated by the Central Bank of Ireland, which has published regulations governing its operation. It is expected to start producing credit reports after December 2017.
Credit reference agencies collect both negative information and positive information about consumers. Negative information is information about any default on credit repayments, such as arrears, missed payments and bankruptcies. Positive information is information relating to your overall financial standing, such as your overdraft limit, the limit on your credit card and records of your repayments.
The main credit reference agency for individuals in Ireland is the Irish Credit Bureau (ICB) but there are several other agencies, mainly dealing with businesses.
The ICB compiles a private database of information supplied by its members, which are the main financial institutions, including some credit unions. Local authorities are also members. Membership does not include utility companies or retail outlets. The database includes information on a wide range of loans, including personal loans, mortgages and credit card loans. That information is available only to members of the ICB (and, of course, to yourself).
The ICB does not decide whether or not you get a loan. Financial institutions use the information held by the ICB when deciding whether or not to lend to you.
International credit rating agencies (for example, Moody’s, Fitch’s, Standard and Poor’s) generally assess business debts and have little relevance to consumers.
The Irish Credit Bureau’s database will only hold information about you if you have had an active loan in the past 5 years and if your lender has provided information to the ICB. The information is held in an individual credit report. It includes:
The system records when a lender has consulted it, so you can find out if this happened in your case. Every financial institution that is a member of the ICB is required to provide you with details of any credit reference agency it has used when assessing your application for a loan.
Credit agencies may publish lists of judgments registered in the Central Office of the High Court (for example, such lists are published in Stubbs Gazette and some newspapers). This is public information. You have no control over its publication or the use that is made of it.
Credit scoring is a technique which summarises your credit status at a particular point in time. The ICB will calculate a Credit Bureau Score (CBS) based on your credit report if a lender requests it (only if the lender is an ICB member).
If you have a good record of repaying loans, then you get a high score. You get a low score if your repayment record is poor. The only way to improve your credit score is to improve your repayment record.
Your consent is required for the provision of information about your credit history to the Irish Credit Bureau. However, it is sometimes the practice that such consent is an integral part of your credit agreement, so you may not notice that you have given consent.
You have the usual rights under data protection legislation (pdf) to access the records held about you by credit agencies and to have incorrect information rectified. You may ask the agency to provide you with a copy of the personal information it holds about you. If this is inaccurate, you may ask the agency to correct it. If you are not satisfied with how the agency deals with you, you may appeal to the Data Protection Commissioner.
The European Communities (Consumer Credit Agreements) Regulations 2010 (SI 281/2010) provide that creditors, before agreeing to give you a loan, are obliged to assess your creditworthiness based on sufficient information obtained from you and, where necessary, from a database of such information. They also provide that, if you are refused credit because of the information found on the database, the creditor must immediately tell you this and give you particulars of the database used. This legislation applies to personal consumer credit agreements for amounts between €200 and €75,000 and it does not apply to mortgages.
At present, there is no regulation of such agencies. There is an EU proposal to regulate credit rating agencies.
You can get a copy of your credit record by applying online to the Irish Credit Bureau and paying €6. For security reasons, it will be posted out to you. It will not be emailed.
Only 1 search can be conducted per application, and the ICB takes about 3 or 4 days to process each one.
The report that the ICB issues will display a unique reference number. You may then contact the ICB to discuss your report, quoting this unique number. You cannot discuss your credit record with the ICB by phone until you have received the report.
If you wish to have inaccurate information on your credit record amended, contact the lender concerned and ask them to forward the correct information to the ICB. The ICB cannot change the information unless asked to do so by the relevant lender.
The ICB has published further information about credit ratings.
Tel:(01) 260 0388
Fax:(01) 260 0390
If you have a question relating to this topic you can contact the Citizens Information Phone Service on 0761 07 4000 (Monday to Friday, 9am to 8pm) or you can visit your local Citizens Information Centre.