How Is It to Have a Bad Credit Reputation? Part 3

So yes, when you failed to pay your balance with your credit card bank and not follow the monthly payments due, you will have your credit card get cancelled. It is the beginning of the ordeal. With the shame on it, with the bank's collecting agents nagging you at your office to pay, you will eventually feel cold-footed. You will suddenly be nervous that you may be sued by the Bank for not paying.

Fortunately, my brother who was then studying law told me that no one gets imprisoned for unpaid debts. My other sister who is also taking up law now will add that the Philippine Constitution has explicit provision on the no-criminal liability for not paying debts.

A result of credit card non-voluntary cancellation is the submission of your name to the Bank Association of The Philippines' Negative List. This list is a roster of debtors who has been reported by Philippines banks for not being responsible enough to pay their debts. When you got included in it, your life is over. Or at least that was what I felt. Young debtor. Me. Then.

The inclusion of your name in that dreaded list will definitely block you from availing of car loans, house loans, education loans, etc. It will prevent you from having or attaining an affluent life which everybody does dream of. It was painful to think of it. Your own future and the future of my kids are at stake! First of all, I never want them to experience the life I had which was hard. That was how fast-forward my thoughts then was. I don't know but my mind is on a blast during those time. It's what they call a rush life even that I am a "probinsyana".


Below is an interview with Topper Coronel, President of the Bank Association of the Philippines (BAP) regarding the Negative List (Interview Transcripted) which I had clipped from Pinoy Money Talk.

The BAP Credit Bureau is just the repository of information. That means garbage in, garbage out. The banks themselves make the list. However, there are only several bank officers within a bank who are specifically authorized to modify that list and they are responsible for its reliability. They can get sued for mistakes. We are not worried about the accuracy of these lists. We are not dealing with kids here.

Yes, there are triggers for people to be listed and these are agreed upon by participants of the system. These include canceled credit cards due to improper usage, not voluntary cancellation. Even when the credit card falls past due, it is not immediately placed on the list. We make allowances for curable periods where a borrower might have merely forgotten to pay.

Banks as a rule look at the total credit history of a person. If you have a cancelled credit card or a bounced check but have paid the amount already, it is the obligation of the bank to make a notation that you have rectified the situation.
Personally, my advice is to deal with banks that know their business. If I were a bank, I would rather deal with someone who has had bad experiences with credit but got burned and has reformed, rather than someone who is spotless. Those who process credit applications and reject someone right away because of some bad decisions are lazy and are not doing justice to the bank. We are not dealing in heaven where there are only spotless angels.
Also, good banks invest in good systems. There are algorithms that check not just the name but also the address, birthday and other personal details. The BAP’s system can check details like middle names. We have enough safeguards to make sure we don’t make mistakes and ruin people’s lives. Our system can only be accessed by two or three very senior people and it is fully audited and fully secure.
The best way to check would be to write a letter of request to the BAP and we can check the system for you. Then we can tell the bank to review their records.