Myths and realities of the credit bureau

Mitos y realidades del buró de crédito

It has a reputation for being a blacklist of debtors, but it can be an ally to manage your finances wisely. Find out how to use it to your advantage.

Let’s start with the simplest question: What is the credit bureau? It is the service that records your loan, payment and debt activity, and presents them to the institutions that request it. This is a credit information society and Mexico has two recognized companies of this type, Círculo de Crédito, and the most famous, Buró de Crédito, a company that integrates the history of people and companies in a report. Being the most used, the service has been popularly baptized with the same name.

In the database of a credit information society, both the late payments of a debtor and the punctual ones are marked, so that any institution from which you request a loan can consult those references and decide whether it is convenient to accept your loan application or not . He is a neutral administrator; however, around it there is a lot of confusion, so we clarify the most common doubts.

If you have delays in your payments you do not have to wait for the information to be deleted to improve your history and obtain credits. If you catch up, it will reflect that you are fulfilled. SOURCE: CONDUSEF.

Myths and realities of the credit bureau

Myth 1

It is a list of people who do not obtain loans.

REALITY: In fact, it might help you get one. As companies keep a record of all your credit movements, good and bad, it is an advantage to have a good record that confirms that you are able to pay your debts in the conditions to which you committed. That your record in the credit bureau is positive is something useful when you need to make large applications, such as a mortgage, since it is your support as a good buyer that will contribute to obtaining better financing.

Myth 2

There are companies that can erase your debt.

REALITY: In Mexico, there are many people who scam debtors with promises to eliminate the data from the bureau, but your history cannot disappear and is registered for a certain time (from one to six years), depending on the deficit you have. With the passage of time, your record is updated according to your new movements and, if you have not made any after six years and have no debts, then your name will be deleted. “To date we have removed 22 million people from our data,” they explain on their website.

Myth 3

The bureau is capable of vetoing you in the banks.

REALITY: Credit reporting companies do not approve or reject credit and do not list people for debts. Its database can be consulted by the companies that grant financing, but it is they who decide whether or not they can lend you the desired amount. The credit bureau has no vote on this issue.

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Check your history

By law, you can consult it once a year for free, to see how your numbers are and detect anomalies such as credits that you did not request, badly reported payments or unauthorized inquiries to your history. If you do not agree with the report, you can claim up to two times a year at no cost, just fill out the claim form and have your INE and documents that support your complaint at hand.

Beware of Hacienda

The SAT (Tax Administration Service) will begin to issue instant invoices to those who have expenses with credit or debit cards greater than their income, since, they assure, this is a cause of Income Tax, and since late payments of taxes can be reported to the credit bureau, this billing measure could also be reflected in your history. The consequences are not yet clear, as the first invoices will begin to be issued in the first half of 2020.

What your credit report says

Includes consumer loans, mortgages, departmental cards, among others. Your payment behavior is broken down in each item. The activity is measured in UDIS (Investment Units of the Bank of Mexico) and according to the amount will be its permanence:

• Debts less than or equal to 25 UDIS (up to 113 pesos) are eliminated after one year.
• Debts greater than 25 UDIS and less than 500 UDIS (up to 2,260 pesos) are eliminated after two years.
• Debts greater than 500 UDIS and less than 1000 UDIS (up to 4,520 pesos) are eliminated after four years.
• The rest of the debts, less than 400,000 UDIS (up to 1.7 million pesos) are eliminated after six years.
• Debits of more than 400 thousand UDIS, are permanently recorded in your history.

By: Jessica Moreno

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