An old debt may return like a boomerang

Let's imagine the following situation - you are applying for a loan (e.g. an auto loan). You have already chosen the car model, extras and the price has been agreed. Suddenly, during the paperwork, you are informed that your loan application has been rejected. It turned out that in the past you were in arrears with some payments and details of your debt were reported to a debtor reporting agency. The bank thinks that you cannot be trusted and this time refuses to give a loan. You have a problem. How is it possible that the bank still has information about your old debt which had been paid a long time ago and about the fact that you were reported to a debtor reporting agency?

Information about current debts of consumers and businesses may be reported, among others, to debtor reporting agencies such as ERIF BIG SA,  while information about defaults on past loans may be found by banks in credit information bureaus or in their own files.

Debts in the register

The Credit Information Bureau (BIK) provides services for the banking sector. Among others, BIK collects information about unpaid loan instalments. If the lending bank includes a special clause in the loan agreement (which is usually the case), the history of your payments will remain recorded in BIK even after your loan is repaid. In practice, such records are kept for 5-7 years.

Another group of entities collecting and making available information about past due payments are debtor reporting agencies. There are three such entities in Poland. ERIF Register of Debtors is one of them. Data about the debt may be stored there while the debt exists and is past due. When the debt is paid, the creditor has a duty to notify the credit information bureau within 14 days about the debt’s being paid off by the debtor. The credit information bureau (BIG) has another 7 days to remove the former debtor from its register. The above is the requirement set forth in the act on the provision of business information and exchange of credit information which regulates the operation of  BIGs.  Thus, if data about the debt had been reported to the ERIF Register of Debtors, they will be deleted when the debt is repaid. 
The entity which inquired about our debt with BIG and received the requested information has a duty to delete such information within 90 days from the receipt (Art. 26 item 1 of the act of 9 April 2010 on the provision of business information and exchange of credit information, Dziennik Ustaw No. 81, item 530). However, there is one exception. The above act does not apply to institutions whose statutory duty is to assess credit or operating risk. Thus, a bank which in the past inquired with the ERIF Register of Debtors about a debt of a consumer did not have a duty to delete the obtained information after 90 days. It may use such data practically indefinitely.

It is better to pay a debt than to be blacklisted.

“The bank we are applying for a loan at will certainly want to assess our credit rating and determine our creditworthiness. Even if now our account is clear, the bank may store information about our past debts which it once found in BIG,” says Edyta Szymczak, President of the Board of the ERIF Register of Debtors. “That is why it is best to pay our liabilities as they become due. Then we certainly will not be reported to a debtor reporting agency. However, if we find ourselves with a past due debt, it is best to quickly reach an agreement with the  creditor or a debt collection agency acting on the creditor’s behalf. We can always find an amicable solution (sign a settlement and agree to pay off our debt in instalments) thanks to which we will not be blacklisted. It is worth knowing that such a possibility is offered to its debtors by KRUK SA, Poland’s largest debt collection company,” added ERIF’s CEO.

What else is worth knowing?

Every six months we can check free of charge whether our data have been reported both to BIK (Biuro Informacji Kredytowej), and to one of Poland’s three debtor reporting agencies. In BIG (e.g. in the ERIF Register of Debtors) we can not only check whether a creditor (bank, but also a telecom or utility or internet supplier) has reported our debt but also if there were any enquiries about our details or if a document stolen from us or forged in our name was illegally used. The above information may be obtained via the traditional channel (in person or by post), but the most convenient form is via the internet. You can check whether your details have been reported to the ERIF Register of Debtors by visiting the InfoKonsument.pl webpage or by calling the Consumer Service Department at (22) 59 42 515.