Top angle view of judge gavel, calculator, coins and notebook written with text BLACKLIST
Top angle view of judge gavel, calculator, coins and notebook written with text BLACKLIST

Debunking the Credit Blacklist Stories in the Philippines

Credit cards are a staple in modern day finance. For individuals, cards are a huge help to their finances as it allows them to pay for loans, bills, and other purchases conveniently. But cards aren’t just for individual users–they’re also a great help for financial institutions. In fact, the weight that cards have over banks and other loaning corporations are quite heavy, such that many believe the existence of a credit blacklist.

If you’ve been roaming the financial side of the internet, then you’ve probably seen posts and articles about the credit blacklist. Financial groups and blogs publish articles on how the credit scoring system works and how to get out of the blacklist. But what exactly is the credit blacklist and how does it work?

Learn more about this complex topic and how it affects you in this article:

bank staff refused a man's housing loan application

What are Credit Blacklists?

If you’ve ever been rejected from a loan or credit card application, you’ve probably been told that you’re in this blacklist. But this isn’t necessarily the case. More than anything, the credit card blacklist is one of the most common credit myths in the Philippines.

For many people having a bad credit score is tantamount to being in the blacklist. This is because individuals with bad credit scores often get rejections in many of their financial endeavors. The concept of the blacklist probably started when applicants were repeatedly rejected from loans and applications. However, their credit score is the more palpable cause rather than a comprehensive credit blacklist in the Philippines.

So is the credit blacklist real? Not necessarily. While there is no comprehensive credit blacklist here in the Philippines, many financial institutions will conduct a rigorous credit check on your account. From fraud detection analytics to debt, institutions pull from a wide range of financial data to determine your creditworthiness.

How Do You Check If You’re Blacklisted for Credit in the Philippines?

Even without a comprehensive blacklist, it’s still pretty easy to figure out if you’re in the proverbial credit blacklist. Once you find yourself constantly rejected and in a tricky financial spot, it’s not unsurprising to find yourself on the wrong side of many financial institutions. While you won’t be able to get a verbal confirmation, there are ways to know whether you’re in or out of the list.

Here are some ways to check if you’re in the credit blacklist in the Philippines:

man checking his credit score using his mobile phone

Check your credit score

The first step is always to check your credit score. The data on your score is usually the information that banks and other institutions share to determine an applicant’s creditworthiness. Without knowledge of your financial health, there’s absolutely no way to take any steps to improve your credit score. Check in with accredited financial institutions to get an accurate report.

Familiarize Yourself with Relevant Financial Institutions

It’s a well-known fact that banks and other financial institutions share information and other relevant data. To make this info exchange easier, these institutions have formed groups. Of course, the data shared within these groups are only accessible to members. If you’re dealing with these groups, chances are your financial data has already been shared among the members.

The most important thing to note when researching these groups is that they share data about your credit. This means that your financial health, credit scores, and history are shared information to many of the members. If you find yourself constantly rejected by banks and companies within the group, then there’s a high chance that they have checked your record already.

Some of the important financial groups to know are:

male employee explaining paper contents to female credit applicant

Credit Management Association of the Philippines

The CMAP is a non-profit association of over 400 finance-related companies in the Philippines. These companies include banks, lending firms, insurance, telecommunications, and trading companies. The association aims to ensure quality information exchange between members.

Credit Information Corporation

The CIC is a public credit registry in the Philippines. As an institution, the CIC is where you can get your basic credit report. Since the CIC is a government-owned corporation, the official information collated by the institution is often a good indicator of your financial health and creditworthiness.

Bankers Association of the Philippines

The BAP is an organization between universal and local banks in the Philippines that aims to optimize banking services in the country for maximum efficiency and effectiveness. As part of this goal, the association has its own subsidiary credit bureau, the BAP Data Exchange, Inc (BAP-DX). Similar to the previous financial institutions, BAP members are able to access this database for reliable data credit services.

woman sitting on couch and looking on her credit card and laptop

What to Do If You Check Fail the “Credit Card Blacklist Check”

So you’ve been “blacklisted”, what do you do next?

Well, first of all–you don’t have to despair. Of course it’s hard to repeatedly get disapproval from banks and loan companies. The good news is that getting in the so-called credit blacklist doesn’t mean that you’ll be completely rejected by financial institutions. But getting out of the proverbial blacklist means making an effort to fix your credit score.

The first thing to consider is how long being in the blacklist lasts. Again, since there’s no comprehensive blacklist in the country, what you’ll have is essentially your credit record. This includes the positives and the negatives of your financial history. Generally speaking, debts–even those paid–will still be visible up to three years in the CIC database. Knowing the status of your credit opens up your room for negotiations.

If you’ve been “blacklisted”, here are some things you can do to still be financially mobile:

Negotiate with lenders

When it comes to loan approval, lenders need to see that you are financially responsible. The most important step is communicating that you are working on your debt. Lenders have to understand that you aren’t running away from your responsibility and that you have the capability to make payments.

Talk to banks

Banks are surprisingly flexible when it comes to negotiations. Much like lenders, a bank needs to see that you are willing to pay your debt in full. Once they see this, you may open the discussion for a restructure of your payment terms.

Leverage your alternative credit scores

Your alternative credit score is a key indicator of your financial capability and responsibility. This is particularly true for individuals who don’t have a long credit history. Among the many types of credit, alternative credit opens up a lot of opportunities–especially if you aren’t in the “red flag” yet.

Pay your debt

More than anything else, debt payment is the most effective way to remove any hits on your credit score. Settling your debt is a key step in getting out of the credit card blacklist. Make sure to request a certificate of full payment and keep your communication line open with financial institutions about your debt completion.

millennial Indian female smiling on smartphone with credit card

Getting Out of the Credit Blacklist With Good Alternative Credit

The credit blacklist may just be one of the many financial myths here in the Philippines, but it isn’t without basis. Unresolved debt and a long history of bad credit is more than enough to put you on the negative spectrum of most financial institutions. The impact of being in the proverbial credit card blacklist isn’t something you’ll want to experience.

Getting out of the credit blacklist in the Philippines takes time–but it isn’t something impossible. Debt payment, open communication with financial institutions, and a good alternative credit score are steps towards financial mobility that you can take.

FinScore is a financial technology company in the Philippines that offers a powerful credit scoring platform and fraud detection tools based on alternative data, including telco-based data. 

As the pioneer in lending and scoring of the unbanked, we continuously provide fintech services that empower financial institutions, banks, and credit bureaus with flexible platforms to help them make insightful and reliable credit decisions. Contact us today to learn more about our products and solutions for financial institutions.