Are you applying for a loan? Check what BIG knows about you

Service Business

When investments in the company become necessary, the entrepreneur begins to look for a solution suitable for his company. Investment loans can be a good idea, but it is worth measuring your intentions and taking a loan that you can pay off without arrears. Why is it so important? The credit history will not only remain in the bank where the loan was taken - in case of problems, it will go to the Credit Information Bureau.

What is BIK?

The prototype of the Credit Information Bureau is the bank register of clients temporarily defaulting, created in 1991. Its creation was sought at the end of the last century by the Polish Bank Association. On the other hand, BIK, in the form in which it functions until today, was established only in 1997, when the Banking Act entered into force.

What does the Credit Information Bureau do? Its database contains information about borrowers who have credit accounts at cooperative and commercial banks or credit unions that participate in the information exchange system at BIK. It is worth remembering that not all facilities use this option. Therefore, the office stores contact details of bank customers, information on the amount of debt, timely repayments or the amount of arrears. Importantly, BIK is not a list of debtors with arrears, so people who pay their installments on time will be added to the database. This is important information, because an entry in BIK is often treated as attaching a debtor's patch, reducing the creditworthiness of the entrepreneur or consumer, which is not true.

Who has access to the data in the Credit Information Bureau? BIK operates on the basis of information exchange - therefore a bank or other financial institution, by joining the office, provides it with the database of its borrowers. Other financial institutions participating in BIK have access to this data. In order to obtain data about a specific client, the unit asks the office about its history and the so-called scoring - that is, a creditworthiness score. Information is provided by BIK against payment.

Why is information from BIK so important for financial institutions? Well, these data help in assessing the most important issue for a bank or other entity regarding a potential borrower - namely creditworthiness.

What is creditworthiness and what affects it?

The term "creditworthiness" is familiar to anyone who has ever thought about a loan, and it often spends sleepless nights on those who want to get a bank loan. Which means? The creditworthiness determines to what extent the bank's customer is solvent - i.e. whether it can be assumed that he will be able to pay the installments of the loan itself on time and pay any additional costs. Importantly, the costs for the bank are not only interest or liability insurance. It is also all other recurring expenses - fees, bills, maintenance of yourself and the family, etc. On the other hand, the amount of revenues is also taken into account.

As you can see, the current situation of the potential borrower has a huge impact on the creditworthiness. In addition, it is extremely important for financial institutions whether their client has made credit obligations so far and how they have proceeded. If the loan is taken at a bank or institution other than the one already received, this is where the field for the Credit Information Bureau appears.

Information from BIK may affect both positively and negatively on the situation of the loan applicant. This is because if the bureau's report contains information that, under the current loan agreements, the entrepreneur has timely fulfilled its obligations and completed all formalities, it will significantly increase its credibility. On the other hand - delays, mistakes in the amounts paid or current arrears can drastically reduce the customer's creditworthiness. When signing a loan agreement, the bank must have grounds for assuming not only that the borrower will repay his obligation, but also that he will be able to pay the aforementioned additional costs, such as interest, which is one of the main sources of income for banks and other financial institutions.

What if there is no information about the person in BIK? It is of course possible - it will be the case for every person who takes a loan for the first time, or for a person whose liabilities expired at least five years earlier - BIK has the right to administer the borrower's data for such a period of time. Actually, the lack of information about the client in the office is good news - it can be said with a high degree of certainty that he is not in arrears. On the other hand, the financial institution does not have data on the reliability of the entrepreneur, so it may be less willing to grant a loan. It is difficult to clearly determine which direction a particular bank will follow.

Information in BIK is not a secret - a report for the borrower

Information from the Credit Information Bureau is available not only to financial institutions - also the borrower himself can obtain a report on his own credit history. In this case, two options are provided for bank customers - paid and free. Therefore, if someone has a history recorded in BIK, once every six months he can apply for a free report - the so-called Standard. If, on the other hand, it is necessary to obtain additional information sooner than after six months, he can obtain the Plus report, which is issued for a fee.

What you need an office report for? Thanks to it, the entrepreneur can check his current credit history, which will certainly be useful when deciding on the next loan. At the same time, such a report may explain why it is not possible to sign another contract despite the good financial situation or the current timely repayment of loans. It happens that errors appear in the history of BIK, often to the disadvantage of the borrower. In such a situation, it will be necessary to contact the appropriate bank, and not to BIK. The Credit Information Bureau only deals with the administration of data, the database of which it receives from individual financial institutions, but does not make changes to them on its own. Therefore, any shortcomings should be clarified with the bank itself.