So Thriving Dollars had their bi-monthly money meetup titled “Please Credit Me” “. I knew this one was going to be good (they’re all good) because credit information in Jamaica isn’t widely known or spoken about.
Kenishia sat down with Craig Stephen, the CEO of CreditInfo Ja and Vevine Cameron, Senior Credit Manager of First Global Bank. The conversation surrounded how your credit history impacted getting loans, what was included on your credit report and even how to get your credit report.
Firstly, let’s define what the term credit means
Credit (noun): the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
Many times people take out credit cards, forget about loans and this subsequently ruins many people’s credit score.
As much as it’s advised to stay away from debt, most people will have to pick up debt at some time or another in life. Some people even think its better to spend someone else’s money than your money.
Whether it’s by having a credit card, student loans, mortgage or car loan, debt is almost inevitable. What you don’t want is to need to take out a loan but can’t because you have bad credit. Having bad credit doesn’t damn you to not ever getting a loan ever again though.
How your credit score affects you getting a loan
When you go to a financial institution, not the payday loan businesses, think of your local bank, they assess you based on your credit as one of the criteria. They want to know that if they lend you this money you’re requesting if you’ll pay them back. As much as we’d like them to take our word for it, they prefer to minimize their risk by accessing your credit report from the credit bureau.
Along with the credit score, the credit report will show how consistently you make payments on your other loans you might have or used to have. The credit report shows them how many loans you have currently and they can decide whether or not they should grant you another.
Red Flags to Financial Institutions
- If you have multiple loans and are making mostly late payments, they’re less likely to lend you the money. However, if you typically make payments in a timely manner but for a period of time you ‘fell off’ they will accept a letter outlining what happened to cause this anomaly. They might be caring or they need to keep their business running, regardless of the cause, utilize it.
- Financial institutions also have access to the fact that other financial institutions are checking your credit report. This is a red flag for them because it means you’ve been applying for loans are being declined and they’ll want to decline you too.
- In case you’re chuckling to yourself and thinking “Well I’ve never borrowed a loan so there’s nothing on my credit report, I’m good”, I’m going to burst your bubble. Not having a credit history is a red flag because they don’t know if they can trust you. They suggest getting a credit card and paying off your bill on time every month before applying for a loan so that they can trust you.
- They notice salary reductions that go to payday loan institutions, they don’t seem to like that.
- Financial institutions also assess the utilization of your credit card if you have one. They take more kindly to you if you use 80% and under your credit card limit.
What You Can Get If You Have Good Credit
Unlike the USA having good credit won’t get you a lot. You can ask for an interest rate reduction if you have a good credit score. However, it would be nice to have a way lower score as a reward for people that have good credit because unless you ask, you’re getting the same interest rate as the guy that barely qualified for the loan.
How to Fix Your Credit
- Identify what is negative- Figure out what’s dragging down your credit score.
- Get a loan to pay off the credit card.
- Structure the payment as a salary deduction so that it’s consistent which is something that will reflect positively on your credit report.
Your credit report will have 7 years worth of information on it, however, your credit score will only reflect your last three years of activity.
You’re Entitled to a Free Credit Report
Credit Report-A credit report is a detailed breakdown of an individual’s credit history prepared by a credit bureau.
You can actually access your credit report once a year for FREE. According to CRIF Information Bureau Jamaica, you will need:
“1. Your TRN and a valid government-issued photo ID (e.g.…*Driver’s License, Passport, Voter’s Registration Card) or a valid Driver’s License
2. In the event that you do not have a valid ID, we will accept a passport size picture certified by an approved official (e.g.…*Justice of the Peace, Pastor, Medical Practitioner, Attorney-at-Law, Superintendent of Police or Bank Manager).
3. Proof of address (e.g.…*Recent utility bill or bank statement in your name; or proof of address form/letter signed by one of the approved official listed above)..”
What to Do If You Think There is An Error on Your Credit Report
If you think there is an error contact the Bureau, they will
- Handle disputes within 14 days from the date you open the dispute.
- Follow up with the institution you have a problem with.
- Flag the issue so other institutions that request to see your credit report knows.
- If corrected, sends the correct report to the institution within 6 months.
The next money meet up is SEPTEMBER 26 and its theme is: Investing for Wealth. I wouldn’t miss it if I were you.