A credit score is a numerical representation of your creditworthiness – your ability to repay your debts. It is a really important piece of information that is held by officialdom and used by lenders to make assessments of whether or not you deserve a loan. It is surprising that so many consumers are unaware that such sensitive pieces of data exist; that they are held by unelected officials and that they might be incorrect!
Under the Credit Reporting Act, 2013 a Central Credit Register was established under the auspices of the Central Bank. This was set up to rival the Irish Credit Bureau, which is run by a variety of financial institutions in Ireland. From 30 September 2018, it will be compulsory for lenders to access the Central Credit Register when considering applications for consumer loans of €2,000 or more. Consumer loans include mortgages, credit cards, in-store credit, bank overdrafts and other personal borrowings.
The system centres on the providers of credit submitting your personal data to the central database – data like the amount you owe; your repayment record; how many repayments you’ve missed; applications declined, etc. – in other words some very, very sensitive data. The data is accessed by lenders when they consider your mortgage application or your request for an increase in your overdraft or credit card limit.
Applicants are assigned credit scores based on their historical habits of paying off previous loans. In reality, your credit score can have a very significant impact on your ability to borrow money for a new car or a new suite of furniture. We would wager that some 99% of people reading this article do not know their credit score and most would be shocked to learn that it may well be inaccurate.
All consumers are entitled to receive a credit report on their personal data at any time free of charge. Under the recently enacted General Data Protection Regulation all data controllers are obliged to provide consumers with details of their personal data without delay.
MMPI recommends that consumers should submit a request to the Central Credit Register to glean what is being held on their files. The CCR can be contacted at:-
If your score is unjustifiably low – check to see if all of the information is accurate. If it is correct, the low score could hinder your ability to borrow in the future. If you find yourself in this predicament there a few quick rules-of-thumb that will help you improve your credit score. 1. Try to make your repayments on time – this will show that you have changed your ways; 2. Try to consolidate your debt – this will make it easier for you to keep track and meet your repayments; 3. Enrol on the Electoral Register – amazingly having your name on the register presents the impression of an upstanding citizen and, therefore, helps your credit score.
Your credit score only matters when something is amiss. Who’s keeping score? It should really be you!