If you want to take out additional loans from a bank despite already being a debtor, how well would you manage this additional debt burden? The National Credit Bureau can help check your debt-servicing ability.

For those readers who are unfamiliar with the bureau, Personal Finance today is running a credit bureau primer.

What is the credit bureau?

The credit bureau is the country's credit data centre. It collects all debtors' credit data. If you have taken out loans from a financial institution that is a member of the credit bureau, which most of them are, your credit data is likely on file with the bureau.

What kind of data is collected by a credit bureau?

The bureau keeps financial data including the borrower's history of applying for loans, the amount of credit they are carrying, loan-approval record, and loan-payment record. Normally, the data is updated monthly.

What is the credit bureau's responsibility?

It collects a borrower's credit data and reports it to other organisations, according to the law.

However, the credit bureau can disclose data only when a borrower gives it permission to do so. The credit bureau can disclose a client's data only to a finance institution at which the borrower has applied for a loan. Obviously, the financial institution must be a member of the bureau.

 The credit bureau collects data on personal loans, credit card loans, mortgage loans, and car loans.

Who acts as the credit bureau in Thailand?

The National Credit Bureau Co Ltd (NCB), which currently has around 60 private and state-owned financial institutions as members.

Serious attempts to establish a credit bureau started in mid-1994 when a group of financial executives pushed the Association of Finance Companies to get the ball rolling.

 In September 1999, two credit bureaus - the Thai Credit Bureau and Central Information System (CIS) were established.

CIS was later renamed Central Credit Information Services.

 In February 2005, the two companies were consolidated and the name of the merged entity was changed to the National Credit Bureau in May 2005.

Can individual borrowers check data by themselves?

Yes, debtors can check their credit data in order to protect their rights regarding lending activities.

How can an individual check his data?

Individual borrowers must fill out a form and submit it to the NCB's head office with a copy of their identification card.

How much does it cost to check your credit record?

The NCB has four packages that borrowers can choose from, including an annual report, one every six months, one every quarter, and one every two months. It charges Bt200, Bt350, Bt600 and Bt600, respectively, for the reports.

Can a borrower adjust his or her data if he finds a mistake?

Yes, the NCB can correct the data upon request, as long as the borrower submits the required backup documentation from the lender. Getting a letter from the lender stating that you have not missed a payment or never made a payment late will help.

How can a borrower maintain a good credit status?

Borrowers should maintain their debts in the right proportion to their ability to pay them and should pay their monthly debts on time.

Credit-card holders in particular should have as few cards as possible and should close accounts that they don't use.

Moreover, borrowers should keep from paying loans and check their credit data at least once a year.

If there is a mistake in the data, borrowers should have it corrected it as soon as possible.

Because lenders, in the course of granting credit, normally consider each customer's debt-servicing capability before granting a loan, customers should keep their credit records clean.

Somruedi Banchongduang

The Nation