Financial Institutions, Credit Bureaus and You
November 6, 2015 – Ghana Business & Finance

Interview with Gabriel Ofori Yeboah of Dun & Bradstreet Credit Bureau Ghana Limited

People have become increasingly dependent on credit. Therefore, it’s crucial that you understand personal credit reports and your credit rating (or score). In today’s dialogue with Gabriel, we’ll explore what a credit score is, how it is determined, why it is important and finally some good tips to acquire and maintain good credit. 

The credit bureaus that issue thee scores have different evaluation systems, each based on different factors. Some may take into consideration only the information contained in your credit report.

The primary factors used to calculate an individual’s credit score are his/her credit payment history, current debts, time length of credit history, credit type mix and frequency of applications for new credit. Because the scoring systems are based on different criteria which are weighted differently, the three major credit bureaus in Ghana – Dun & Bradstreet Credit Bureau Ltd., HudsonPrice Data Solutions Limited and XDSData Ghana Limited, all licensed by the Bank of Ghana – may issue differing scores based on the same credit report information.

A lot of people in Ghana use these credit reports like mortgage lenders, banks, prospective employers, microfinance operators and more. So it’s especially important that you understand your credit report, credit score, and the companies that compile this information from the credit bureaus.

Once again, I am here to get the answers to some of the most common and most important questions regarding credit bureaus raised by the public and situations I have come into contact with, and I believe at the end of this dialogue you will be much more appreciative of the shared ideas.

Question: Gabriel, what is a credit report?
Gabriel: Well, I would define a credit report as a document that contains record of your credit history; which includes information about your contact history, your identity, your name, address history, date of birth, and possibly employment history with your contact information.

It captures your existing credit information about credit that you have: amounts as your credit facility or loan amounts, mortgage, agriculture facility, Auto Loan, Bank Guarantee, Discounted Bills, Education Loan, and Bills of Purchase. It may also include the duration of your credit, how much you owe to the creditors, and your history of pending payments. It spells out your public record information about any court judgments against you, any tax suits against your property, or whether or not have filed for bankruptcy. It includes inquires-history about you - with list of companies or persons who recently requested copy of your report.

Question: Why is credit report important?
Gabriel: Your credit report is important because banks, insurers, employers and other financial institutions may obtain your credit report from credit bureaus to assess how you  meet your financial obligations as they fall due.

Currently, banks in Ghana use credit reports to decide whether you qualify for a loan and on which terms to grant you the loan (for example you repayment history as wells as what interest rate can be applied in your particular credit facility) .

Insurance companies may use the information to decide whether you can get insurance and to set the premiums you will pay to get insured.

Employers in Ghana, especially in the financial sector currently use your credit report – if you give them permission to do so – to decide whether to hire you. A good credit report facilitates quick employment, since it creates a picture of trust and honesty as well as creditworthiness.

Going forward, even landlords may use the information to determine whether to rent an apartment to you or not. Funny, isn’t it?
The importance of credit today is significant; overlooking this fact can be very detrimental to your financial health. Being aware of how your credit score is calculated is essential.

Question: Okay Gabriel, if so then why is good credit management so important?
Gabriel: Good credit plays an important role in your financial life. Not only is it essential for obvious things like qualifying for loan or getting credit card, but also for less obvious things like getting cellular telephone service, renting a car and perhaps even getting a job.

Managing your credit will also help you save for a rainy day. A strong credit history reflected in good credit scores, will let you qualify for lower interest rates and fees, freeing up additional money to set aside for emergencies, retirement and other smaller unexpected expenses. Decreasing debt and increasing savings reduces stress and leads to greater financial freedom.

Question: Yeah, that’s amazing. Gabriel, who collects and reports credit information about me?
Gabriel:  Currently, there are three major credit bureaus operating in Ghana – Dun & Bradstreet Credit Bureau Ltd., HudsonPrice Data Solutions Limited and XDSData Ghana Limited – which gather and maintain the information about you that is included in your credit report. These credit bureaus then provide this information in the form of a credit information report (CIR) to companies or persons that request it , such as banks from whom you are seeking loans.

Question: Wow! So Gabriel, where do these credit bureaus in Ghana get their information?
Gabriel:  These credit bureaus in Ghana get information from your creditors, such as banks in Ghana, and Non-bank Financial Institutions (NBFIs) such as micro-finance operators. The Bank of Ghana has mandate all the above-mentioned institutions to submit their loan data to these credit bureaus on monthly basis, so the information in one credit bureau’s report may not be so different from the information in another credit bureau’s report all things being equal.

Question: That’s awesome Gabriel; So how can we get a copy of our credit reports?
Gabriel: Alright, you can easily get copies of your credit report from each of the nationwide credit bureaus – Dun & Bradstreet Credit Bureau Ltd., HudsonPrice Data Solutions Limited and XDSData Ghana Limited via email or walk-in.

You can request these reports at various times throughout the year. The Bank of Ghana has mandates that every individual has the right to their own credit report for free once a year. The option you choose will depend on the goal of your review. A report generated by any of the three major credit bureaus such as Dun & Bradstreet Credit Bureau Ltd. may contain all updated information pertaining to your credit history.

Question: Well noted, but who else is allowed to see my credit report?
Gabriel:  Assessing credit reports from credit bureaus is done on a subscription basis, and only institutions apart from individuals who have subscribed to a bureau’s service are allowed to view the credit report. Because credit reports contain sensitive personal information, access to them is limited. Financial institutions are bound by the Data Protection Act, and consequently only institutions that a person may have some form of agreement to view their reports or this person may have approached to seek for credit facility have authority to view the said individual report.

Credit bureaus can only provide credit bureaus to Lenders (Banks, Microfinances etc.) from whom you are seeking credit facility and are proposing to grant you that credit facility; your employer or prospective employer, but of course with your consent agreement; insurance companies that have issued or may issue an insurance policy for you; government agencies reviewing your financial status for government benefits; and anyone else with a legitimate business need for information, such as a potential landlord.

Credit bureaus also furnish reports if required by court orders. Upon your written request, they will also issue your report to a third party.

Question: Gabriel, does the credit bureau decide whether to grant me credit?
Gabriel: No, credit bureaus do not make credit decisions. They provide credit reports to lenders who decide whether to grant you credit – but note it is your credit report that will facilitate the process of the lender approving or rejecting your credit facility application. Your good credit report can serve as collateral, which means a good credit report offers lower interest rate and flexible repayment terms.

Question: How long does negative information, such as late payments stay on my credit report? 
Gabriel:  Generally, negative credit information stays on your credit report for seven years. If you have filed for personal bankruptcy, that fact stays in your report for ten years. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until stature of limitations runs out, whichever is longer. Information about criminal convictions may stay on your credit report indefinitely.

Question: What can I do if I am denied credit, insurance, or employment because of something in my credit report? What can I do if I receive less favourable credit terms than other consumers because of something in my credit report?
Gabriel: Okay, note that if you are denied credit, insurance or employment – or some other adverse action is taken against you, such as lowering your credit limit on credit loan account – because of information in your credit report, the lender (banks), insurance company, or employer must notify you and provide you with the name, address, and phone number of the credit bureau that provided the credit report used to make the decision. You can get free credit report from Dun & Bradstreet Credit Bureaus Ltd. if you request it for the first time.

Question: What is a credit score? How is my credit score calculated?
Gabriel: A credit score is a number that reflects the information in your credit report. The score summarizes your credit history and helps lenders predict how likely it is that your will pay a loan and make payments when they are due. Lenders may use credit scores in deciding whether to grant you credit, what terms you are offered, or the rate you will pay on loan.

Information used to calculate your credit score can include numbers and type of accounts you have (auto loans, mortgages, etc.), how much of your available credit you are currently using, whether you have any collection actions against you, the amount of your outstanding debt and the age of your accounts.

Question: What can cause my credit score to change?
Gabriel: Because your credit score reflects the information in your credit report, changes to your credit report may cause changes in your credit score to change. For instance, late payments of loan or incurring more debt can make your credit score to go down. However, if you pay an outstanding balance on a mortgage or correct an error in your credit report, your credit score may go up.

Question: How can I correct errors found in my credit report?
Gabriel: If you find errors in your credit report, you may dispute the information and request that the information be deleted or corrected. To do so, you should contact either the credit bureau that provided the report or the company or person that provided the incorrect information to the credit bureau. All disputes must be reported to a person to the bureau by the affected subject. Upon receiving any such dispute, the bureau contacts the institution that submitted such data with the specific anomaly for the necessary correction/s to be made effective.

When disputing information on your credit report, you should provide information about yourself, such as your name, address, date of birth, and identity-specific details about the information that is being disputed and explain the basis of your dispute. Have a copy of your credit report that contains the disputed information available.

Question: What happens when the corrected information has been submitted to the bureau?
Gabriel: If you submit dispute through a credit bureau or directly to the company or person that has provided the incorrect information to the credit bureau, your dispute will be___ investigated – usually within 5 working days. If you provide additional information during five day investigation, that investigation time may be extended for additional 3 days in some circumstances. When the investigation  is completed either by the credit bureau or the company or entity that provided the incorrect information to the credit bureau, it must give a written result of its investigation.

If the information provided regarding the dispute information is inaccurate, it must notify all three nationwide credit bureaus with the correct information on your credit report. You can get a copy of your report if disputes has resulted in a change. This free report is in addition to your annual free report. If any information changed or deleted, a credit bureau cannot put the disputed information back in your credit report unless the company or person that provide the  incorrect information to the bureau verifies that the information is indeed, accurate and complete.

Question: Gabriel, one of the important questions is this: what is a debt management agreement?
Gabriel: Organizations that advertise credit counseling often arrange for consumers to pay debts through a debt management plan (DMP). In a DMP, you can deposit money each month with a credit counseling organization. The organization uses these deposits to pay your credit card bills, student loans, medical bills, or other unsecured debts according to a payment schedule they’ve worked out with you and your creditors.

Creditors may agree to lower your interest rates or waive certain fees if you are repaying through a DMP. Some organizations that offer DMPs have deceived and defrauded consumers. If you are paying through a DMP, contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the organization handling your DMP.

Question: Gabriel, thank you very much for your wonderful time and knowledge shared. Any final words to the public on the key factors that drive you in your field of endeavor.
Gabriel: Well, it has been my experience that competency in the business and financial world, both in banking and in understanding its conceptual operations, enhances a person’s ability to handle more ambiguous and qualitative relationships that dominate our day-to-day financial decision-making; and so the general public should take keen interest and be motivated in acquiring financial knowledge and keep reading Business and Financial Times, B&FT newspaper where you can be well abreast with financial news. Fix your credit today and save thousands in loans and finance charges, and finally get yourself out of that harm.