During Covid, I had to avail of the loan repayment break on my taxi. When things began to return to normal, I talked with Bank of Ireland Finance and they offered me an “informal” agreement to start the repayment again at a lower amount until business got going.
When I felt I could return to the regular repayments, I called them, and we agreed to pay extra on top of that to cover the shortage from the previous repayments.
I later applied to Bank of Ireland for a loan, and was turned down because I was on the central credit register. Subsequently, I applied for overdraft facility and a credit card limit increase but was again turned down because of this CCR listing, I phoned Bank of Ireland Finance and asked if paying the outstanding €1,500 would clear my “CCR blacklisting”, and they said yes, so I paid. But I was still on the blacklist, so I phoned them and asked them to return the money as I was still on the list, which they did.
Firstly, this CCR listing seems unjust, as I’d engaged with the bank all along – yet they put me on this blacklist that’s supposed to last for five years over a misunderstanding. Who can I turn to to get this corrected?
More than 150,000 people applied for loan repayment breaks in the months after the arrangement was sanctioned by the Central Bank and agreed to by most of Ireland’s mainstream bank and non-bank lenders. So you are far from alone in having found yourself in that position back in early 2020.
And there was certainly supposed to be protection for all these people in relation to the Central Credit Register that is maintained by the Central Bank, to ensure they would not blacken their credit rating.
However, people’s finances are rarely simple. Your letter presents a scenario with which many people will likely be familiar. Covid got you into financial difficulty, you approached your lender, agreed a break and subsequently lower repayment terms and then, proactively, approached them to offer enhanced payments to catch up on any shortfall.
As you say, it seems unfair that your credit rating appears to be shredded on the back of that experience, especially as you appear to have a longer-term relationship with Bank of Ireland than just this loan. In those circumstances, you might expect them to make a more holistic assessment of your financial standing, rather than simply acting on this one Covid-impacted loan.
However, even in the absence of dates and timelines in your letter that would have been useful, there are other features to your case that may explain why you fell outside the terms of the agreed loan repayment break.
We need to turn the clock back to March 2020 – but first, it might be instructive for some readers to understand what the Central Credit Register actually is.
Central Credit Register
Introduced in 2017, the Central Credit Register contains details of all consumer loans in excess of €500 issued by banks, credit unions and any other non-bank lender that deals in consumer finance to any person. This would include personal loans, mortgages, credit card balances and overdrafts.
The system was extended in 2018 to cover loans issued by local authorities and licensed moneylenders as well as business loans and, since 2019, to include hire purchase agreements or similar credit, such as personal contract plans which are widely used for car purchase.
The data will include your name, current and former addresses, date of birth, your PPS number, and even gender, phone number and Eircode. More importantly, it will include details of the type of each loan you have, including the amount of the loan, the amount outstanding and who the lender is.
For each loan, it will also say when the next payment is due and for how much – and, critically, the number of overdue payments, if any.
As long as your repayment break was formally agreed with the bank and did not extend for more than six months, there should be no credit record issue
Lenders can seek a copy of your full report when they are looking at whether to extend you credit, and are obliged to seek such a report where the amount you are looking for is €2,000 or more.
Individual borrowers can also seek a copy of their report.
The Central Bank consistently stresses that it does not crunch your borrowings and payments to get a “credit rating”; it simply records the details above and any lender, then makes up its own mind on whether to lend on the back of those details.
It’s something the regulator is very touchy about, but I can certainly understand your view that an adverse credit record can effectively constitute a “blacklisting” among generally risk-averse lenders.
Loan repayment moratorium
Moving on to Covid and missed payments, the Central Bank agreed an arrangement with the Banking and Payments Federation of Ireland in March 2020. It would allow people struggling with repayments because of illness or general Covid disruption to employment and commerce to secure a three-month break from loan repayments. This was later extended up to six months.
At the time, the Central Bank said: “Banks will introduce three-month payment moratoria on mortgages, and personal and business loans for some business and personal customers affected by Covid-19.”
It added that the regulator “expected” all regulated firms, including banks, retail credit and credit servicing firms, to take a consumer-focused approach and to act in their customers’ best interests.
The Central Bank also said that borrowers availing of payment breaks of up to six months would not be classified as having missed payments on the Central Credit Register. Writing at the time, its governor Gabriel Makhlouf said: “We are also working with lenders to develop practical measures so that the credit record of those who avail of a payment break includes an appropriate recording on the Central Credit Register, so that their credit record is protected.”
[ 2020: Irish banks offer relief to borrowers hit by coronavirus ]
So, as long as your repayment break was formally agreed with the bank and did not extend for more than six months, there should be no credit record issue. If it was more than six months, your record might well be affected.
The problem in your case may arise from the subsequent “informal” agreement to recommence loan repayments, but at a lower amount. There was nothing in the agreement between the Central Bank and the banks covering this, as far as I am aware.
It also highlights the lunacy of agreeing anything “informally” with a lender. “Informally” generally means there is no written record of the agreement and therefore nothing to fall back on when it turns out that both sides have a different understanding of the arrangement and its implications – as has likely happened here.
Now you could say the bank should have made this clear, and I would agree, but the lack of anything in writing just undermines your ability to make a case to anyone such as the bank itself or even the financial services ombudsman.
I am certainly concerned about your understanding that the bank said you could “clear the CCR blacklisting” by paying the outstanding €1,500 due. If that were the case, your previous consistent payments above the agreed monthly amount should have been “repairing” the credit record.
I don’t see how it would alter the record, except as an entry to say the loan was paid off (possibly in advance of its ultimate due date). The bank cannot rewrite the credit record any more than you can, although you can seek to have factual errors amended. I’m not remotely surprised that your credit record would still show the lower than originally agreed payments in the past. And I expect they will do so until the five years have passed.
Again, the faultline of your argument here is that everything was done by phone.
Correcting the record
That doesn’t mean you can do nothing. I think you should apply to the Central Credit Register for a copy of your record, to satisfy yourself that it does at least show the enhanced repayments as you made up for lost time. This is free, and anyone can seek a copy of their own record at any time.
It is quite likely that the record will show you underpaid over a number of months even after the loan repayment break. And, unfair as it is and despite you having made good since, that might be enough to persuade a lender not to consider increasing your credit limits or extending new loans right now.
However, there is an opportunity to have an “explanatory statement” attached to that particular loan. It allows you to explain the circumstances relating to underpayments on the loan although it must be less than 200 words long. To be clear, this is not the forum for complaining about the bank’s decision, just basic information on how the underpayments arose.
It will be visible to any lender looking at that loan as part of a review of your record, and will remain there as long as the details of the loan are on the record. And even if it doesn’t change Bank of Ireland’s mind, it might influence how other lenders view your record.
The problem in your case may arise from the subsequent “informal” agreement to recommence loan repayments, but at a lower amount
If there is a factual error in your record, you can request that it be amended, though it may take a few weeks as the register may need to check back with your lender and be comfortable that the amendment itself is accurate.
For a copy of the credit record, or to make an explanatory statement or seek amendment, the best route is by filling out an application form on the Central Credit Register website. It will guide you on what information you need to provide. Less efficiently, you can email firstname.lastname@example.org or send a letter to Central Credit Register, Adelphi Plaza, George’s Street Upper, Dún Laoghaire, Co. Dublin.
And bear in mind that just because Bank of Ireland is not currently interested in lending to you, it does not mean that other banks, credit unions or other lenders would necessarily make the same decision. There is nothing to stop you applying elsewhere for a loan, making sure you are totally upfront about the Covid repayment experience so they have no surprises when they consult the Central Credit Register as they will be obliged to do.
But please, make sure everything is in writing, so you are clear that you have said what you want to say in the way you intend and they will have to formally reply to.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to email@example.com. This column is a reader service and is not intended to replace professional advice