There’s no shame in missing a payment or two, or even three or more with your credit card or other loans. Many Filipinos are struggling to pay their bills and the pandemic that has been going on for years has certainly not helped anyone. What’s shameful though is running away from your creditors hoping time will make them give up, write it off and you can get away with it.
Sorry to burst your bubble, but your unpaid debt is no secret that will only stay with you and the bank or credit card company you owe. If you’ve tried to borrow money from online lenders, you may have discovered that being late on your payment or not being able to pay at all has given them the right to shame you. on social networks. And worse, you gave them that right when you signed up for the loan.
So if you have outstanding loans or are drowning in credit card debt, know that no debt is ever truly forgiven in the Philippines. Here is some information you need to know.
#1 You can’t leak a credit report
In 2008, Republic Act 9510 was passed, otherwise known as the Credit Information System Act, which led to the creation of the Credit Information Corporation (CIC). Thanks to CIC, credit reports can now be generated reflecting all of any individual’s loan contracts with lending institutions, even utility subscriptions, as well as other financial obligations.
Note that your credit file is only accessible with your authorization, which is generally collected by the organization from which you borrow. But before you breathe a sigh of relief, also note that you cannot opt out of having your data submitted to CIC as the law has given them the power to do so. Like it or not, CIC will continue to collect all data about your loans and bills, and will share it as soon as you apply for a loan or even a job when the company asks for it with your consent.
#2 No Negative Database Escape
Prior to CIC, there was another credit information directory and it may still be very present. Known in banking circles as the NDB for Negative Database, this is the list you don’t want to end up on because it will stay with you for life. The thing about NDB is that no one talks about it openly, but it’s very real and still accessible by many financial institutions. Not only do they consult this list when reviewing a loan application, but even when evaluating potential employees, business partners, endorsers, suppliers, etc.
From rumors I’ve heard, the NDB is not updated when you pay off a loan. The burden of proof is on you, even assuming you are told you are in the NDB and that is why they will not loan you out, hire you or work with you.
#3 No debt can be reduced
Did you really think the years would erase your debt and your negative balance sheet? Let’s see what happens if you have an outstanding credit card balance.
You will first receive updates from your bank or credit card company, and there will be reminders via email, SMS as well as phone calls. Around the 180 day mark or when they decide to cancel it, they will turn your account over to a third party collection agency. You will get legal notices and more calls and these agencies won’t give up until they catch you and pay you. You can change your cell phone number, move to another address, but your file will remain with them until the debt is settled. In the meantime, this unpaid credit card debt will end up on your credit report and likely in the NDB, reducing your chances of loan and credit card approval in the future.
#4 Say yes to amnesty programs
Understanding the heavier financial burden imposed on consumers in recent years, amnesty programs are offered by both the government and private companies. You can initiate it by calling your creditors and asking for amnesty, or you can also wait for announcements or offers. All creditors want to be paid, so if you approach them with a payment plan, they will most likely be open to negotiation.
The best amnesty program is one that waives all interest payments which are often much larger than the principal amount you owe. If you can also get an interest-free payment plan that you can afford, my advice is to take it, take it!
#5 It’s your turn to ask for proof of payment
Once you’ve paid off a debt, don’t go out and party yet (and borrow again with your credit card). It is important to obtain a certificate of full payment from that credit card or bank, or any lender. Keep a record of this certificate because in the event that your credit report indicates that you have an outstanding loan, or you are told that you are on the NDB list, you can waive this certificate and demand that they clear your record. .
You can access your credit report at any time from one of CIC’s accredited credit bureaus, CIBI Information Inc. through the CIBI app. You can access the app through your web browser at https://cibiapp.cibi.com.ph/#/login.
Just a warning that you will be asked for a lot of personal information plus two IDs and a digital signature to register. Once you have an account, you can stay on top of your credit history by logging in anytime. Note that if you have no loan transactions on your credit report for two or more years, they will not be able to generate a credit score for you.
Disclaimer: The opinions expressed in this blog are those of the blogger and do not necessarily reflect the opinions of ABS-CBN Corp.
Warning: The opinions expressed in this blog are those of the blogger and do not necessarily reflect the opinions of ABS-CBN Corp.