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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11 Feedbacks on "Good story on bad credit"
paetechie
so this process of clearing one’s name will change when the credit information law is implemented, right?
Salve
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!
leela
parang sa US din yan na “never co-sign for a loan.” dito sa pinas, bawal maki-bum sa credit card.
All About Financial Planning
This is another case of Rule of 72 working against you. Power of compound interest against us comsumers.
Paulo Miguel
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”
zaguman
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.
businessman
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.
ceejay33
Even with good credit these days getting a loan has been almost impossible…
ceejay33
Another case of a lack of credit making it harder and harder to get credit.
Josh
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.
Salve
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!
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