A glance at the week that was
Should I care about my credit rating?Yes, more than ever. Not because of any reckless borrowing on your part but because of your bank’s reckless lending in the boom. They put all their money on black, it came up red and they are skint. So now, when it comes to lending, they are tighter than Rod Stewart’s trousers and look for any reason to reject loan applications. A Central Bank report claimed Ireland is second only to Greece in terms of refusing loans. When it comes to rejecting a loan there are few better reasons than a dodgy credit rating.
I’m sure my credit rating is fine. I’ve never missed a loan payment. Are you really sure?We don’t want to be alarmist but that may not be the case. This has not been a good year for Irish banks and the manner in which they are managing our money has not be cause for celebration. First the Ulster Bank IT system collapsed for four weeks. Payments were missed and, while the bank has said customers’ credit ratings will not be affected, it remains to be seen. And what about the non-Ulster Bank customers who could not make payments because money they expected from Ulster Bank customers never made it? The problems have been fixed but the consequences are likely to linger.
But I’m not with those banks, so it’s okay. Isn’t it?Not necessarily. As many as 12,000 AIB customers may have been landed with a poor credit rating because the bank over-reported the level of missed payments to the Irish Credit Bureau (ICB) for six years before the error was spotted by customers.
The Irish Credit what now?When a customer misses a repayment on a loan or hire-purchase agreement an alert is sent to the ICB warning other banks about the dangers. The ICB seeks missed payment details monthly, but AIB gave details of those who missed weekly or fortnightly payments, thus quadrupling the numbers.
That doesn’t sound good. How can I check my credit rating? It is very simple. Give the ICB personal details through icb.ie, pay €6 and it will mail you your Credit Bureau Score. You can see all the information banks get about you, how you rank and what banks have asked about your rating.
What do I do if it doesn’t look good?Well, if you have been a victim of the stupidity of Ulster Bank or AIB you contact them and get them to sort it out, but it is more complex if your numbers look bad because of your own actions.
How can I fix my credit rating?
Manage your current account carefully.
If you are a couple of days late with a loan repayment, the information won’t go to the ICB but it will show up on your current account as a referral fee.
Just one referral fee in the past six months will almost certainly see you refused.
Anything else?Try not to leave too much of a money trail for your bank to follow. Banks are increasingly applying soft underwriting tactics to select the best borrowing candidates.
They will trawl your account and if they see money going to a bookies, regular late-night ATM withdrawals on Camden Street or weekly sums going to an off-licence, they will most likely go all puritanical on you. Conor Pope