If you’re mired in runaway consumer debt and don’t know how to pick yourself up, here’s something that should give some measure of comfort: you’re not alone.
There are more than five million credit cards out there with P116 billion charged to them based on end-December 2007 figures from the Bangko Sentral ng Pilipinas, the Philippine central bank, and P16.5 billion have fallen past due.
Assuming Filipinos are an android population with identical spending habits, we have an average of P23,219.60 charged to our credit cards. Are you below, or higher than the average?
Now, these are just credit cards. Filipinos owe P81.8 billion in auto loans and P4.4 billion of the amount turned past due in December 2007. In the Philippine setting, that’s probably just half of what is owed to five-six lenders, personal loans with banks, family members and friends.
See, you’re not alone 
The question is: is it possible to repair a bad credit record? That’s tricky, but not totally impossible, as I said in my article in the Philippine Daily Inquirer “Five steps to fix a bad credit record.” Here’s a summary
- Admit your mistakes. Hiding from creditors has never done anyone any good.
- Pay your debts. Ask for better terms, but understand that you will have to pay interest. We can’t really expect the bank to bend over backwards for us alone, can’t we?
- Save regularly in the same bank. The regularity over time will help you tell your turnaround story convincingly. Some banks allow you to borrow against that deposit, too.
- When you pay your loan fully, ask the bank to give you a certification.
- Live within your means.
I once got a phone call from a friend who said since her record is bad anyway, there’s no use paying for a car loan that has turned sour. That’s digging yourself deeper. Maybe bankers are a little bit boring and unforgiving, but some of them are actually not that bad. It can’t hurt to talk to one if you really are having a problem with paying your debt. Call them first; don’t wait for them to call you.
P.S. If you are a glutton for punishment and want to see my face and hear my voice after reading this blog, catch me later on Mornings@ANC. I will be guesting again on their program “Money Matters.” I think the program will start at 9am.
July 14th, 2008 at 10:27 am
i don’t belong here. i don’t even have a credit card and so i don’t have a credit history (except for a year with BPI express credit i discontinued since I don’t use it). Citibank last year year turned me down in a card application for no apparent reason and without telling me why, even if I submitted my ITR and payslips and stuff (maybe a risk management blunder). When they came a calling at me again after six months, i flatly told them i don’t need them and their plastic card.
I wonder what happened to the proposed credit bureau? trapped in bureaucracy, I guess. My credit history will reflect on my current payments to my condo and vacant lot i’m paying thru postdated checks.