Sharing your Credit Information through the System

Late last year, a new law was passed creating a centralized credit information system, intended to address the need for reliable information concerning the credit standing and track record of borrowers. There are some reservations and criticisms raised against this move, principally surrounding the issue on privacy of each borrower’s credit information. This is Republic Act No. 9510, also known as the “Credit Information System Act“.
The Credit Information Corporation. The new law created this Corporation, the primary purpose of which is to receive and consolidate basic credit data. It is the central repository of credit information, authorized to release credit information, including credit history, of borrowers to certain entities.

Source of credit data. Entities that provide credit facilities are required to submit relevant credit information on borrowers. These entities include banks, quasi-banks, trust entities, investment houses, financing companies, cooperatives, nongovernmental, micro-financing organizations, credit card companies, insurance companies and government lending institutions. The Corporation may even access credit information from government offices, judicial and administrative tribunals, prosecutorial agencies and other related offices, as well as pension plans administered by the government.

Right to information. Before, many borrowers are mostly in the dark about their credit standing, and the borrower would have an idea about it whenever their credit card or loan application is denied. Under the Credit Information System Act, the borrower shall have the right to immediate access to his/her credit information. For a fee, of course. Speaking of denial of credit card/loan application, the borrower also has the right to know the causes of refusal from a financial institution that uses basic credit data as basis or ground for such a refusal.

Confidentiality of credit information. As if to assure the public, RA 9510 provides that credit information shall be kept strictly confidentiality, to be used only for the declared purpose of establishing the creditworthiness of the borrower. It does not impair the secrecy of bank deposits/funds provided in other laws and provides for sanctions, including imprisonment, for violators.

Right to dispute credit information. The credit standing of a borrower matters a lot, especially to Pinoy Entrepeneurs. It’s obvious that an erroneous, incomplete, outdated or misleading credit information is seriously prejudicial to Pinoy Entrepreneurs who seek to fund their business endeavors through borrowings. Under the new law, the borrower have the right to dispute the erroneous, incomplete, outdated or misleading credit information before the Corporation.

It’s not that bad, is it? You may also want to check theĀ Primer, here.

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