Do you know if you have ever borrowed in a financial institution your data is in CRB? Lending institutions are required by the law to submit information of all the people they extend credit to or the people who owes them money at the end of each month to the registered bureaus. In Kenya we have three credit bureaus; TransUnion, Metropol and Creditinfo.
Therefore, if one is not able to pay a given instalment on time it reflects on the CRB report in terms of days late and the outstanding balance. Loans are classified in five classes according to how late one is in making repayment; Normal, Watch, Substandard, Doubtful and Loss. From day 1 to 30th day of being late in repayment that is Normal. In this case only one or less than one instalment is due. From 31st to 90th day that is Watch. In this case two or more instalment are late. This is the time loan officers calls you every day or visits you to know what is going on.
The loan goes to Substandard class from 91st day to 180 days. At this stage more than 4 instalments are late. At this point the debt collection officers must pay you a visit. They come to collect the security offered. This is the time properties like motor vehicle and household items are carried. In case land was used as security court cases begin. From 181 days to 270 days the unpaid loan is in Doubtful stage. From 271days to 360 days the loan is classified as Loss. Those are the major classes of loans listed on CRB. All loans whose instalments are paid on time and those in normal class are regarded as positive listing, while Watch, Substandard, Doubtful and Loss means negatively listed.
But, after 360 days the loan is classified as write-off. This is done to remove the loan from the institution loan book. But, it still remains in the institution systems. That is why people who borrowed from some financial institution years ago and never paid are still regarded as defaulters because they are negatively listed.
Being on CRB is good. For example, people with loans classified as Normal means they are good payers of loans. While, those in other classes are people who do not honour loan obligations. It is good to note that even if a loan reaches write-off stage and the borrower pays it, he or she is not denied credit in the future. This is because he or she proofs he or she pays what is extended to him.
Therefore, whether listed positively or negatively being on CRB is good. A person who is not on CRB is risky to extend credit to. This is because it is impossible to determine his or her credit worthiness. Such a person no matter how rich he is, the first loan he or she is given is very little.
The information submitted include name, Id number, amount borrowed, loan duration, monthly instalment, days late, mobile number, loan account number (when loan is extended a loan account is created automatically). This information is used to build credit history of a person. This is done every month.
Therefore, if one is not able to pay a given instalment on time it reflects on the CRB report in terms of days late and the outstanding balance. Loans are classified in five classes according to how late one is in making repayment; Normal, Watch, Substandard, Doubtful and Loss. From day 1 to 30th day of being late in repayment that is Normal. In this case only one or less than one instalment is due. From 31st to 90th day that is Watch. In this case two or more instalment are late. This is the time loan officers calls you every day or visits you to know what is going on.
The loan goes to Substandard class from 91st day to 180 days. At this stage more than 4 instalments are late. At this point the debt collection officers must pay you a visit. They come to collect the security offered. This is the time properties like motor vehicle and household items are carried. In case land was used as security court cases begin. From 181 days to 270 days the unpaid loan is in Doubtful stage. From 271days to 360 days the loan is classified as Loss. Those are the major classes of loans listed on CRB. All loans whose instalments are paid on time and those in normal class are regarded as positive listing, while Watch, Substandard, Doubtful and Loss means negatively listed.
But, after 360 days the loan is classified as write-off. This is done to remove the loan from the institution loan book. But, it still remains in the institution systems. That is why people who borrowed from some financial institution years ago and never paid are still regarded as defaulters because they are negatively listed.
Being on CRB is good. For example, people with loans classified as Normal means they are good payers of loans. While, those in other classes are people who do not honour loan obligations. It is good to note that even if a loan reaches write-off stage and the borrower pays it, he or she is not denied credit in the future. This is because he or she proofs he or she pays what is extended to him.
Therefore, whether listed positively or negatively being on CRB is good. A person who is not on CRB is risky to extend credit to. This is because it is impossible to determine his or her credit worthiness. Such a person no matter how rich he is, the first loan he or she is given is very little.
