So, we make money mistakes. Big deal. What matters is what we do to recover and learn from them.
One MoneySmart reader, I will call him Danny, made a credit card mistake in the past enough to put him on banks’ negative list. The misdeed technically was his brother’s, who used his credit card to buy a computer and promised to pay him monthly.
You probably guessed what came next. His brother failed to pay, and the P18,000 debt ballooned to P30,000 within a year. Danny paid everything by 2004, but by that time, his name was already hot listed.
Fast forward four years. Now, Danny feels that after 11 years of financial stability and having paid his debt in full, he deserves the benefits of a credit card. He applied with HSBC, Bank of the Philippine Islands and Banco De Oro but got rejected. He sent an email to the Bangko Sentral ng Pilipinas’ Financial and Consumer Affairs Group, asking about what he can do to clear his name.
With the help of Bangko Sentral Managing Director Johnny Noe Ravalo and FCAG head Elvira Ditching-Lorico, Danny’s case was forwarded to the banks concerned. Turned out that the bank that issued his first credit card failed to update his records even after full payment, that is why his name—up until early November this year—was still on the negative list.
But Danny feels that all’s well that ends well. On November 5, he got his newly minted credit card. He got his name cleared and I’m sure that felt good. Now, don’t go burning that card, Danny, ok? Enjoy your new credit, but be responsible :-).
Good story on bad credit
So, we make money mistakes. Big deal. What matters is what we do to recover and learn from them.
One MoneySmart reader, I will call him Danny, made a credit card mistake in the past enough to put him on banks’ negative list. The misdeed technically was his brother’s, who used his credit card to buy a computer and promised to pay him monthly.
You probably guessed what came next. His brother failed to pay, and the P18,000 debt ballooned to P30,000 within a year. Danny paid everything by 2004, but by that time, his name was already hot listed.
Fast forward four years. Now, Danny feels that after 11 years of financial stability and having paid his debt in full, he deserves the benefits of a credit card. He applied with HSBC, Bank of the Philippine Islands and Banco De Oro but got rejected. He sent an email to the Bangko Sentral ng Pilipinas’ Financial and Consumer Affairs Group, asking about what he can do to clear his name.
With the help of Bangko Sentral Managing Director Johnny Noe Ravalo and FCAG head Elvira Ditching-Lorico, Danny’s case was forwarded to the banks concerned. Turned out that the bank that issued his first credit card failed to update his records even after full payment, that is why his name—up until early November this year—was still on the negative list.
But Danny feels that all’s well that ends well. On November 5, he got his newly minted credit card. He got his name cleared and I’m sure that felt good. Now, don’t go burning that card, Danny, ok? Enjoy your new credit, but be responsible :-).
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so this process of clearing one's name will change when the credit information law is implemented, right?
Hi Paetechie, honestly I still don't know. I will have to look into the implementing rules of the law. What I am hoping for at least is that individuals will have access to their own records (with stringent requirements in making sure the right person is accessing the records, of course, to avoid identity theft) so that they know whether there is an error and they can correct the record. That's light years away from the current system where banks are not even required to disclose why a certain person is in the negative list!
parang sa US din yan na "never co-sign for a loan." dito sa pinas, bawal maki-bum sa credit card.
This is another case of Rule of 72 working against you. Power of compound interest against us comsumers.
Danny's case is not new to credit card issues when applying for it. The bank does not care whether or not he was the one who used it.
Danny should have been responsible in taking care of his name in the bank since the bank doesn't even know that it wasn't his fault.
I should say that the market for credit cards is still immature comapred to other countries. It's funny why there's a lot of Filipino's who wants to collect so many credit cards with high credit limit and show it off, spend too much just to sustain their lifestyle yet they don't have high disposable income.
Always remember this! "DON'T SPEND MORE THAN WHAT YOU EARN"
I don't know. I used to have a bad credit also with one of the credit card company. I tried paying for it from the issuer but told me to contact the law firm. I talked with the law firm and they kept on harassing me. I dropped the credit and never paid for it. Past forward 5 years after, I tried applying for an HSBC card and I was granted. I couldn't be more happy in my life.
It's really important to have a good credit rating score. We can't get banks to lend to us if we are not responsible about our finances.
Even with good credit these days getting a loan has been almost impossible...
Another case of a lack of credit making it harder and harder to get credit.
Hi Ms. Salve.
My case is similar with Danny. I used to have a Citibank-Mastercard, My Dream JCB, and Standard Chartered -Visa. During the time that I am using my three cards, I have no idea on the effects of the late payment charges that i incurred for my three cards. Financial Literacy is not yet a part of my life then. Then eventually, I have been a delinquent cardholder of JCB. I haven't paid my dues for two consecutive months. They turned-over my account to the collection-agency. I settled my account by paying a monthly fixed amount until I fully paid my balances last year Feb. 2008. For my two other cards, I already paid the whole balances way back in 2005 for Citibank and 2006 for Standard Chartered. After paying my dues for these banks, I asked them to provide me a copy of certificate that my account has been settled.
Last December 2008, I tried to apply for BDO-Mastercard, and AIG-Visa credit cards. To no avail, after a few weeks, my application has been disapproved. The banks don't even bother to send me a copy of a letter that my application has been disapproved. I just made an inquiry through their Customer service number after three weeks of waiting.
Do my records of late payment and being delinquent has not yet been lift after I paid for my balances?
I may I know the exact email address of BSP Financial and Consumers Affairs Group and to whom will I sent my letter?
What are the documents that I need to provide in order to clear my name?
Thank you very much for your help.
hi josh, all you need to know is found through this link: http://www.bsp.gov.ph/about/advocacies_fin_cam.asp.
Repairing a bad credit record is really one of the hardest things to do and I think that should make all of us more careful the next time :). However, if you have done all you can, don't give up on trying to fix your credit rating. But remember that getting a new credit card is not really the most important thing that you'll get from an improved credit score. It's really the other banking tools that makes financial life easier for most -- a checking account, for example, or a personal, salary or housing loan. These things get you access to cheaper credit than consumer loans like credit cards.
Good luck to you and let me know what happens!
Love the blog! Found it on Google I have bookmarked it thank you for the credit tips.
Love the blog! Found it on Google I have bookmarked it thank you for the Financial tips.
Love the blog! Found it on Ask I have bookmarked it thank you for the credit tips.
Danny's story is going to be an eye opener for many of us who give away our credit cards to our near ones. Even if its only for shopping after reading this article I think I'll be finding myself double checking my card every time it goes out. However I find the rules very rigid. I feel that the name too should be cleared once the debt is cleared but there must be security reasons behind framing such rigid rules and regulations.
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rd. He applied with HSBC, Bank of the Philippine Islands and Banco De Oro but got rejected. He sent an email to the Bangko Sentral ng Pilipinas’ Financial and Consumer Affairs cooler bag supplier
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However, if you have done all you can, don't give up on trying to fix your credit rating. But remember that getting a new credit card is not really the most important thing that you'll get from an improved credit score.
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checking my card every time it goes out. However I find the rules very rigid. I feel that the name too should be cleared once the debt is cleared but there must be security reasons
Thanks for taking the time to discuss this, I feel strongly about information and love learning more on this. If possible, as you gain expertise, It is extremely helpful for me. Would you mind updating your blog with more information?
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I am very much pleased with the contents you have mentioned. Credit card is just the facility if we are not having cash or balance in our account. I wanted to thank you for this great article. I will be waiting for the new updates.
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One MoneySmart reader, I will call him Danny, made a credit card mistake in the past enough to put him on banks’ negative list.
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A friend, whose name I will withhold, started his adulthood with good credit. He soon was able to get credit cards at will, and finance cars, snowmobiles and more. He managed to make the payments on his debt, and went deeper and deeper into debt while he was at it. By the time he was 30 years old, he had over $20,000 in credit card debt, plus loans on cars and business tools.
It was too much to handle. He considered bankruptcy, but was convinced that the credit card companies would reduce his balance due if he just threatened to do so. First, though, he had to stop paying on the cards, or the Ginault Watches companies wouldn't believe he was in financial trouble. He did this, then drafted a nice letter to the companies, explaining his situation. Most of them cut at least 30% off what he owed, provided he paid the remaining balance immediately. This he did with a home equity loan.
In the end, his bad credit rating wasn't as bad as if he had actually declared bankruptcy, so he was able to rebuild his credit score. He has also begun to rebuild his credit balances. His good credit rating has enabled him to begin again the stressful process of overburdening himself with debt.
Credit requires to survives in our life.Everyone wants to credit in our life.Good or bad credit both affects very much our personal as well as professional life.Expert Advisor
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Credit card is just the facility if we are not having cash or balance in our account.I wanted to thank you for this great article.I will be waiting for the new updates.
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Credit card is just a facility for the user to pay immediately if they are not having the enough cash. The credit card user should know about the usage of it properly to avoid certain problems.
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I think that Danny learned his lesson about helping his brother with money. And maybe his brother should learn something too out of this story: playing with debt is not very smart. But this is rather a small problem, but I read on the Virginia reverse mortgage website about people with houses and what problems they face with the global crisis and what they can do so they do not get blacklisted...
There are many money mistakes people have experienced. I think this is widely accepted. Buying things that is not necessary just satisfying ourselves on it then regrets later.
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There are many money mistakes people have experienced. I think this is widely accepted. Buying things that is not necessary just satisfying ourselves on it then regrets later.clothing manufacturer
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Bad credit will always haunt you if you made the mistake of not paying it on time or just quit paying at all. You're looking at an extensive period of time in which you can't borrow money from nowhere... that being the good case.
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