Credit Bureau

For years the JBA has lobbied for the requisite legislation to support the operations of credit bureau services in Jamaica.

Background

A Credit Bureau is an independent agency that compiles data on the borrowing and payment habits of consumers. By keeping track of these data, a credit bureau provides a valuable service to the financial sector. The data allow lenders to view their applicants’ credit history and performance in such a way to improve the quality of the lending decision.

The use of credit information is restricted in order to protect each consumer’s privacy and confidentiality. Credit bureau data have become the cornerstone of the underwriting decision for loans in many countries, notably in the United States, where credit data sharing is considered to be a significant factor in ensuring U.S. economic flexibility and resiliency.

Among the specific benefits to be derived from establishing a credit bureau are:

1. Controlled risk: reduction in loan losses and risk-based pricing.
   
2. Administrative savings: single source of information and of a standardized decision format.
3. Improved customer satisfaction: speed of credit approvals and greater number of approvals.
   
4. Increased Revenue and profit to credit providers.

A credit report is a factual and objective history of how consumers pay their debts. It should contain the following four (4) sections:

• Identifying information
  
• Credit payment history
  
• Public record/collection activity
• Enquiries