The credit registration agency, popularly referred to as BKR, is a foundation created to prevent people from getting into financial trouble.
What is recorded at the BKR
All loans and credits must be registered with the BKR. This makes it possible to oversee someone’s entire financial picture. This also includes, for example, purchases on installments. An example of this is the mobile telephone subscription. Because there is also an amount included in the monthly subscription amount to pay off the telephone, this is considered a credit and is therefore registered.
In addition to recording all loans and credits, payment behavior is also recorded. If payment arrears occur, this will be recorded in the BKR register.
On the other hand, arrears in paying bills are not included in the register because this is not a loan or credit. This can therefore give a distorted picture. Someone who is behind a few hundred euros when repaying a loan will be registered, but someone who, for example, is in arrears with paying his tax assessment or health insurance will not be registered.
The BKR therefore does not provide the whole picture for lenders. A defaulter in areas other than a credit or loan will still not be easy to trace. There are, however, reports to register this type of backlog. In the end, that’s fair.
Regarding a mortgage, registration only takes place in arrears. At the moment, a negative BKR is registered in the event of a three-month delay. In the past this was four months.
Benefits of the BKR
The major advantage of the register is that lenders can limit their risk. This will allow them to offer better rates because the number of defaulters will be low. This is reflected in various interest rates for loans and loans that are relatively low in the Netherlands compared to other countries.
For people who just pay on time, this is a good thing. Ultimately, the costs of default are settled in the interest rates. So in the end everyone pays for the damage suffered by defaulters.
If you unexpectedly have a negative registration with the BKR you may experience problems with taking out a loan or mortgage. People who are registered will agree that, unfortunately, it is not too easy to get rid of this again. So prevention is better than cure as always.
Apply for a BKR and loan
The lender will almost always do a check through the BKR before a loan is granted. Borrowing without a BKR review is really only possible with a mini loan. This in turn translates into interest rates that are quite high.
If you want to quickly borrow a small amount such as 100 euros and you do not want the hassle of a BKR check, then you can use one of the providers of a mini credit. Examples of companies that provide this type of loan are Dapodle and Merratu.