SMEs urged to exercise legal rights as borrowers

CEBU, Philippines - The Credit Information Corporation (CIC) is reminding borrowers to exercise their rights to protect their credit record.

This reminder is directed specifically to Small and Medium Entrepreneurs (SMEs) whose sensitive credit information are prone to exposures.

CIC legal council Aileen Amor-Bautista urged SMEs to expand their knowledge on their legal rights as a borrower, and familiarize the Republic Act No. 9510 of 2008 otherwise known as the Credit Information Systems Act (CISA).

R.A. 9510 enshrines the rights of borrowers regarding who gets to see their credit data and how such information may be used.

In a statement, Bautista said one of these rights is that borrowers themselves should have "ready and immediate access" to credit information about them. This is so that they can also exercise their right to "dispute erroneous, incomplete or misleading credit information."

If the borrower, for instance, discovers wrong information in his credit record, he is entitled to a simplified dispute resolution process to quickly settle or resolve the issue.

The borrower must likewise be informed of any correction or removal of the erroneous, incomplete, or misleading information "within five working days from verification or conclusion of an investigation or from deletion of the disputed information."

Bautista emphasized that if an application for a loan is turned down for instance, the applicant has the right "to know the causes of refusal of an application for credit facilities or services from a financial institution that uses credit data as basis or ground for such refusal."

At the same time, R.A. No. 9510 stipulates that  a borrower must be notified by the company of its obligation to submit and disclose basic data about him to the CIC.

R.A. No. 9510 also protects a person's or entity's credit data from those that are not entitled to see it.

Companies that have access to basic credit data, both positive and negative, from the CIC include banks, trust entities, investment houses, financing companies, cooperatives, NGOs, microfinance institutions, credit card companies, insurance companies, and lending institutions.

Also allowed access are accredited credit bureaus and third-party credit data consolidators, and others providing credit reports, ratings, and similar services.

Negative information refers to data concerning the poor credit performance of borrowers, including defaults on loans, adverse court judgements relating to debts, and reports on bankruptcy, insolvency, petitions, and the like.

Bautista said that under the law, negative information in the CIC's database will be kept "for not more than 3 years from and after the date" the negative information is paid, liquidated, or settled.

Negative information should be corrected and updated within 15 days from receipt of notice of payment.

The CIC is the central registry or repository of credit information in the country, mainly tasked to receive and consolidate basic data and provide access to the credit history and financial condition of borrowers. (FREEMAN)