What is the job of a credit bureau?
A credit bureau is a company, usually licensed by the Central Bank of Nigeria, that collects and analyzes the credit information of individuals and companies. They make this information available to lenders for a fee to inform their loan decisioning process.
Credit bureaus don’t make the decision about if you get a loan or not. They simply make the information about your credit history, which is made up of past loans, as well as your credit score, available to authorized lenders.
What does one do to get blacklisted with the credit bureaus?
This is where the consequences of defaulting on loans begins to catch up with you. The credit bureaus keeps a database of all loans including the ones that are past due. While the credit bureaus don’t have a “blacklist” per se, being seen as a defaulter is seen by lenders as a blacklist.
There are two ways to be flagged like this with credit bureaus:
Defaulting on loans
Not paying back your loans when due is the fastest and surest way to get blacklisted. Once you default and are reported by the lender, this is automatically registered as negative information against your details on the credit bureau’s database.
Getting involved in fraud
This comes in at a close second. Your involvement in fraudulent activities especially with borrowed funds can just as easily get you blacklisted in a wink. If your details are also used without your permission in some questionable transactions without your involvement, you may be left to suffer the consequences.
If you suspect fraud on your account, do not hesitate to reach out to the lender and let them know so they can do the needful.
What happens when you get blacklisted?
This is really a cause and effect situation. Keep in mind that lenders don’t just report borrowers to the credit bureaus anyhow; there must have been a consistent refusal to repay even after a grace period and efforts to contact said borrowers.
You are cut off from accessing credit
Once your details make it on to a blacklist, there goes your chance at accessing credit until this is rectified. Getting blacklisted means you have shown a bad attitude towards credit and cannot be trusted with future loans.
You are barred from getting certain jobs
Background checks for certain jobs (usually the good ones or top roles) require credit checks. Needless to say, it doesn’t bode well for anyone up for a new job whose employer finds to have been blacklisted for defaulting on a loan. Whatever story may exist behind that, we promise you, your potential employer is not interested.
You mar your good name
Unpaid (overdue) debt is not a good color on anyone. It’s bad for your reputation and raises a red flag on your integrity for anyone who comes across these records.
How to get your name removed from a blacklist
Getting blacklisted is not a permanent thing; you can’t ask for your details to be deleted from the credit bureau (as they do not only store negative information but general information about your credit history) but you can get your name removed from the blacklist by doing the following:
First, settle your debt
An unpaid debt is what got you on the blacklist in the first place so the first step is to work towards clearing the debt; even if this means contacting the lender to work out a payment schedule until you’re all settled. Do this and obtain proof of full payment.
Next, obtain a letter of non-indebtedness
When your debt is fully paid, you can ask the lender to issue you a letter of non-indebtedness stating that you have settled all outstanding debts with them and are no longer owing.
Finally, contact the credit bureau or ask the lender to do so
The next thing you need to do is contact the credit bureau to update your credit report to reflect the new status or ask the lender to do so (they have a duty to follow up with this issue on your behalf). It may typically take a few days for the change to reflect and your name to be taken off the blacklist; be sure to follow-up as well.
However, you never borrowed any money to start with but got blacklisted by someone’s error. Here’s what you should do:
- Inform the lender about this issue and follow up with them for a resolution
- If the issue is not fixed within a reasonable timeframe (2 weeks) or the lender refuses to attend to it, you can send an email to cpd@cbn.gov.ng to report them to the CBN Consumer Protection Department
- Be sure to copy the credit bureaus on these correspondences
How to access your credit report
Everyone is entitled to one free credit report per year from a credit bureau, simply apply with FirstCentral, CRC or CreditRegistry to get yours.
If you happen to find that there is an error on your credit report, contact the credit bureau with the following information:
- Full name
- Phone number
- BVN
- Gender
- Evidence of payment
- Clearance certificate/Letter of non-indebtedness (if any)
and request for your credit report to be updated accordingly. There should be no issues as long as you’re able to prove that you are not indebted to any lender.
