loan programs

The Central Bank will soon know if you are not respecting your car finance agreement

The Central Bank is about to start recording details of Personal Contract Plans (PCPs) for car purchases; hire-purchase contracts, which can be used to buy washing machines, among other things; as well as similar financings, on its credit register from June 30.

It will be the first time the regulator has sought to enter such data into its central credit registry since its launch in March 2018. The purpose of the registry is to provide greater transparency to lenders when people apply for a loan.

At the time of its launch, the register, which keeps a record of loans of €500 or more, was criticized for not including details of HP and PCP transactions.

These include the purchase of a washing machine, a car or a television on hire-purchase, or the purchase of a car via a PCP. Given the size of the PCP market – around €1.4 billion – this was seen as a significant omission.

However, a spokeswoman for the regulator said that from June 30, all lenders (regulated and unregulated) will be required to submit personal and credit information on hire purchase, PCPs and types of financing. similar, and this information will be included on credit reports.

This development means that people who find it difficult to repay these financing agreements may now find it more difficult to obtain another one, as their lender will be forced to check the register if they offer financing for sums of €2,000. or more. However, those using HP to purchase a new washing machine or sofa, for example, such as that offered by Flexi Fi through Harvey Norman and other outlets, will not be subject to such rigors; while lenders can consult the register for lower amounts, they are not obliged to do so for amounts lower than €2,000.

Other omissions

Although the register will soon contain details of these forms of finance, it will still contain many other omissions, which will prevent lenders from getting a full picture of people’s finances, as the register is very focused on credit agreements.

People who have been declared bankrupt or entered into a debt agreement such as a personal insolvency agreement or a debt settlement agreement through the Insolvency Service of Ireland are not listed as such in the register. Nor are debt judgments from the courts, tax defaulters, or those who have fallen behind on their tax bills or failed to pay their property tax bill to the revenue commissioners.

Information about those who have not paid a gas bill or rent, or defaulted on a mobile phone contract, will also not be released. Utilities information is specifically excluded under the Credit Reporting Act 2013.

However, borrowers can voluntarily add this information to their credit report if they wish.