Koltso Urala: Lack of credit history is no reason to deny a loan

20 September 2013 (09:26)

September 20, 2013. The Finance Ministry prepared the final drafts of amendments to the Credit History Act that will state clearly that upon the publication of the new Act, the Credit History Bureau will have to annul the empty records and files within six months and not issue any more new dossiers in the future. A credit history file counts as empty if it contains records of data on applications by those borrowers who were not granted a loan, Bank Koltso Urala’s press service reports.

The initiative was put forward by the Central Bank over six months ago. The regulatory authority believes that empty credit history records should be annulled because in some cases they lead to banks refusing an applicant’s loan application for no reason. The Credit History Bureau, on the other hand, feels the problem is exaggerated, as empty credit history records do not really affect a bank’s decision to issue a loan; however, these data can actually be useful for the bank’s customer who would be able to trace possible fraud. Experts estimate empty credit history records only make 5% of all of the Bureau’s databases. Besides, the Economic Development Ministry supported the idea of keeping the empty credit history files intact.

Bank Koltso Urala’s experts support the Credit History Bureau’s viewpoint and feel the problem is exaggerated.

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