An (almost) advisory to all borrowers

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Last time, I wrote about bad creditors. Well, they are not actually bad. They just lack the knowledge on the strategies of collection. This time, I will be writing about bad borrowers also because there are those who really are.

Borrowing has become a way of life nowadays. We borrow money for a lot of various reasons. When we are in dire need. When there is an emergency. When there is an urgent payment to be made. Tuition of our children for example. Sometimes however, if not most of the time, we borrow money not because we are in need but because we are in want. We buy stuff we don’t need just because it is on sale. We even borrow money for no reason at all just because it is easy to do it. Someone even said it is addicting. We just love borrowing. It’s almost like a craving.

This is the reason why credit cards became an instant hit. Lending companies, credit co-ops and the ubiquitous Indian Nationals sprout here, there and everywhere like mushrooms due to this seemingly uncontrollable trend. For one thing, our minds are molded with what they call “instant gratification”. Nobody wants to wait nowadays. So we have instant coffee and instant noodles. Since we cannot wait to buy the latest cellphone, we borrow cash from friends, co-ops and banks in order to buy it without actually thinking about how we are going to pay the money back.

Let me make it clear by the way that it’s not wrong to borrow. We all must borrow at some point in our lives. It may not be today but it will come. What is important now is that we  have to keep a good credit record. If we incurred some negative records in the past, we have to fix it as soon as possible. Why?Having a bad credit record will now affect the chances of your future loan applications. Worse, we may not be able to borrow if our credit profile is so grossly damaged.

The Credit Information System Act (Republic Act 9510) or CISA, is now in the implementation stage, by virtue of which, the Credit Information Corporation (CiC) is created . This CiC will act as a central registry or repository of credit information of borrowers. All credit data, whether positive or negative, of a borrower will be submitted by all participating lending institutions and CiC will receive it, collate it and maintain a data base. The corporation will come up with a profile of every borrower. Every detail of your credit history, from the first time you borrow up to the tiniest detail such as your missed or delayed monthly payment of your amortization even if it’s only once, will be provided.

As a wise creditor always do, he will conduct a background investigation on you regarding your attitude and history of your borrowing. He can access your records and request a copy of it at CiC. Your existing and/or future creditor, such as bank, a co-op or even an individual can be given access rights by CiC to your credit history.

According to Jaime Garchitorena, the president of the corporation, they will be launching the collection of credit data this coming month of June, 2015. All creditors including credit co-ops or multi-purpose co-ops with credit operations may be required to submit the credit history of their borrowers to CiC. Hence, to all borrowers out there like me, take this as an advisory.

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