Bahamian consumers have at least another 12 months to get their financial matters in order, as the first credit reports under the new Bahamas Credit Bureau won’t be issued until early 2021.
Credit bureau and business information company CRIF S.p.A. formally launched the bureau two weeks ago, signaling that start of the data collection period.
This data collection period is expected to take some time as the bureau gathers information on each and every credit holder in The Bahamas.
“It’s anywhere between nine and 12 months before the first credit report will be able to be issued. Because under our legislation here, you have mandatory participants, meaning the financial institutions, so all banks and lending institutions that are formally regulated. But there are a number of other institutions that are going to be encouraged to come on board so that you build that capacity,” Group Chief Financial Officer of Fidelity Bank & Trust International Limited Gowon Bowe, who was also on the selection committee for the credit bureau operator, told Guardian Business yesterday.
“So, ultimately, credit scores are really about information and so the more information in the database, the better the quality of credit rating coming out of it. So, I would say the earliest is in early 2021.”
Understanding the anxiety many Bahamians may face during this period, Bowe said the establishment of the credit bureau should not be looked at as being an attack on those persons that have difficult financial circumstances with their financial institutions, but rather an avenue to illuminate and improve upon their payment practices.
“The practices and mindset of individuals should be to regularize themselves during this year, because information is going to be collected, starting from now, through to that point when you get your first credit scores. So, for persons, like myself, who have a bad habit of – and the wife always curses me – failing to pay their utility bill every month because they forget but it is paid in full in the second month, that may impact my credit score. Because they might say, while you just paid in full there is one month you did miss,” he said.
“So, I would say it’s not only for those who have delinquent loans or negative relationships with banks. But it is also those who may be maintaining a wider positive relationship but have bad practices. So. It’s about disciplining ourselves to say that we are going to be changing our mindset to honor our commitments as they come due. Those elements that are taken away from us without any choice in terms of salary deduction on garnishment that we may have agreed to, those get met, but where we have free opportunities, sometimes we miss them.
“And if you are a person who is committed to paying on time and if you run into difficulties, being upfront and negotiating payment terms et cetera, then ultimately you’re going to keep yourselves in good standing. If you are a person who seeks to run and hide, then now is the time to change that mindset because you have 12 months before the reports come to you.”
The government has said this new reform is an essential component for the nation’s financial system and is expected to add greater transparency to the process of providing credit to both businesses and households.