Understanding your credit history
July 21, 2021
With the recent news that Provident has cleared the debts of all its Irish borrowers, many consumers may be unsure what this means for their credit history. As of 28 June, Provident ceased collecting payments and issued a statement to its customers advising that their credit record would show any outstanding balances as ‘cleared’, but what does this actually mean for its customers?
Firstly, it is important that you understand what your credit history is and how it is used.
Your credit history is a record of any credit/loan you have taken out, whether cleared or existing, within a specific time period. Having good credit history is an important part of getting new credit in the future. Lenders will check your credit history, during the application process, to get information about your track record of previous credit/loan repayments.
The Central Credit Register (CCR)
The CCR is a national database authorised by The Central Bank, which came into effect in 2017 and stores personal and credit/loan information on credit/loan agreements that are €500 or more. The type of information stored by the CCR includes credit cards, mortgages, personal loans, overdrafts and hire purchase or leasing agreements. Not all credit/loan agreements came within the scope of the CCR when it came into effect in 2017. The table below shows the dates the different agreements were included within the scope of the CCR.
|From 30 June 2017||From 31 March 2018||From 30 June 2019|
|Credit cards||Business loans||Hire purchase|
|Mortgages||Local authority loans||PCPs|
|Overdrafts||Licenced moneylenders||Asset finance|
(Source: The Central Credit Register)
The Irish Credit Bureau (ICB)
The ICB stores personal and credit/loan information on the performance of consumers past and current loans and credit. The type of information stored by the ICB includes mortgages, personal loans, leasing agreements and hire purchase. The ICB holds information for five years from the date the credit is concluded, that is when the final payment is made and the loan balance is cleared. The ICB is owned by its members who are mainly financial institutions.
You can access your credit report from both the CCR and the ICB free of charge.
How is your credit history used?
When you take out a loan, you give permission to the lender to send on details about payments in relation to that loan, i.e. payments made, payments missed or arrangements made in arrears cases, to the CCR and the ICB. The information provided can then be used by your lender when deciding whether to approve a loan application in the future.
Your lender will run a check on your CCR/ICB and will receive information on any loan, credit card or overdraft taken out or closed with any lender in the last five years. The CCR will report the last two years on any active loans. Lenders are required, since 2018, to check your CCR credit report for applications over €2,000.
Your credit history shows:
- Your name, date of birth and current address & any previous addresses used by you.
- Names of lenders and account numbers of any loans you currently have or that have been closed within the last five years.
- A history of all repayments made or missed for each month on each loan, including any loans or credit cards you did not pay off completely.
- A record of any legal action your lender took against you.
- Your Credit Bureau Score – if a lender has requested it (Credit Bureau Score is only applicable to your credit report on the ICB).
If you missed repayments, didn’t clear a loan or credit card, or settled a loan for less than you owed, it will show up on your credit history for five years after the loan is closed. This could result in you being refused another loan.
Each time a lender accesses your credit report, they leave a digital footprint. Each footprint is a record of the date, the lenders name, and the reason why that particular lender sought your credit report. The footprint is shown at the end of your credit report, for a period of five years for the CCR and one year for the ICB, after a lender last requested access.
Understanding the information on your credit report
If you apply for your credit report the information you get back can be confusing. Both the CCR and ICB has different ways of presenting the information on your credit report.
The CCR will present information on your loans by using the following data:
- Outstanding balance
- Number of payments passed due (i.e. missed)
- The credit status of your loan
- Any restructure events
The credit status of your loan will provide details on any events during the life of the loan such as a settlement, which would be an agreement to pay less than the amount borrowed, any legal action taken, overdrafts closed or credit cards revoked etc.
The ICB will present information on your loans by showing the performance of the loan over the most recent 24 month period using numbers and letters to indicate events during the life of the loan. The ICB key can be found on their sample credit report.
A sample credit report from the CCR is available here.
A sample credit report from the ICB is available here.
What happens if there is an inaccuracy on your credit report?
Errors in reporting information to the CCR/ICB can happen. If gone unnoticed, errors on your credit report can negatively affect your ability to borrow in the future. If you believe that there is inaccurate information on your report you should firstly request that this be amended by the lender.
If the lender does not amend your information on the CCR you can complete a form online on the CCR website to have this information amended.
Only lenders can amend your ICB report, so if problems or delays occur with your lender, you can make a formal complaint to them first. If you are unhappy with the response you can refer the matter to the following:
If you wish to explain the reason for a missed payment or circumstances about your loan(s), you have the right to place an ‘explanatory statement’ on your credit report held on the CCR.
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