Each borrower is encouraged to take loans reasonably according to his financial capabilities. The slogan “responsible lending” propagated by non-bank loan institutions is now a benchmark of financial standards and a professional approach to the customer. It is geared not to expose the borrower to trouble and worsening of his situation. Thus, most lenders will check if their potential client has a real opportunity to pay back the loan. How will he do it and where can he get the right information?
A loan without creditworthiness?
Loans without creditworthiness are one of the quite popular search terms searched on the Internet. However, not everyone is aware that this does not mean that the loan company will not ask about the applicant’s employment and income. This is a fairly simplified terminology for loans that do not require too high income and allow some arrears of the applicant. Similarly, loans without BIK will not always mean that the lender will not seek information in this register. Although there are actually companies that will not look there, but usually loans without BIK means that the lender will not consider the scoring of the applicant.
Another thing is that creditworthiness is often equated with the score in this register.
Lenders will always check your creditworthiness
The obligation to examine the applicant’s creditworthiness is imposed on the lender by the Consumer Credit Act of 2011. Article 9 1 of this document states: “Before concluding a consumer credit agreement, the creditor is obliged to assess the creditworthiness of the consumer.” Paragraph 2 of the same article adds: “The assessment of creditworthiness shall be made on the basis of information obtained from the consumer or on the basis of information obtained from relevant databases or datasets of the creditor.”
It follows that the lender does not have to reach for information from external registers if he does not want it (the exception is banks). It can only be based on the income statement provided by the customer in the loan application and possibly request a bank statement. Additional verification is therefore a way to minimize the risk of non-repayment, improve the analysis of the application, which, contrary to appearances, positively affects the speed of granting the loan. With the complete data collected from available databases, the loan analysis can be carried out automatically, after applying the appropriate algorithm.
BIK – fear of borrowers?
The Credit Information Bureau is the largest and the most popular database, the resources of which are used by credit and lenders, i.e. banks, credit unions and private loan companies. Currently, it is rare that one of these institutions does not use the BIK register (although such a company is e.g. the popular Seratum Bank), which is a record of the credit history of anyone who has ever applied for or successfully took out a loan, used a credit card, credit renewable or installment purchases. Therefore, it will contain both positive information, informing about timely repayment of obligations, but also negative information, regarding delays and arrears.
The collected data is updated on an ongoing basis by financial institutions and, which is very important, will appear there for at least 5 years, i.e. for the period after which the statutory right to process the personal data of unreliable borrowers ceases to apply. On the basis of the payment history, points (positive and negative) are awarded – the more they are, the better the position of the loan applicant and the greater the chance of it being granted. We have already written about the wider impact of BIK scoring on granting a loan in the article “Loans without BIK. What determines creditworthiness? ”
BIG debtors registers
It is worth knowing that BIG is not a separate database, but an association of several debtors’ registers. The information collected in these registers is available only to those entrepreneurs who sign an appropriate cooperation agreement with BIG. Some lenders use comprehensive services, but some of them only need access to individual registers. The BIG consists of:
- National Debt Register . This is the first register of debtors in Poland. Although it is most often associated – and as its name indicates – with unpaid liabilities, not necessarily with loans, positive information is also recorded. Entry to KRD about a given debtor can be made on the basis of a final court judgment from the amount of $ 200 arrears.
- BIG Infomonitor. Infomonitor is also a register of debtors, but unlike other similar databases, it directly cooperates with BIK and the Polish Bank Association (which is also frequently visited by lenders). So it is one of the most complete databases.
- ERIF Register of Debtors. This register works on a similar principle as KRD and BIK, i.e. it collects both negative and positive information. Not only financial institutions, but also securitization funds, local government units, private entrepreneurs (e.g. supplying media), and even consumers can enter into this database. We wrote more about the way this registry works in the article “What is ERIF and who goes to it?”
- National Bureau of Economic Information. The distinguishing feature of this register is the direct cooperation with corresponding entities in other European countries: Germany, Austria and Switzerland, which facilitates the recovery of debts abroad.
In addition, lenders often use their internal databases, which only include non-bank loans. They will see there not only financial arrears, but also the frequency of applications, the number of loans granted and rejected. GetScore is such a platform, as well as the EUCB database, which we discussed in detail in the article “EUCB Database – what is it and what companies use it?”.