A third credit bureau has been approved to operate in Jamaica.

Credit Information Services (CIS) joins Creditinfo Jamaica and CRIF NM Credit Assure in acquiring a licence, having got the nod from the finance ministry and the Bank of Jamaica.

Under the terms of the licence, CIS has been given a period of 12 months to commence the business of issuing credit reports under the Credit Reporting Act.

Both Creditinfo and Credit Assure commenced operations last year.

Currently, all major commercial banks, two building societies, the Students’ Loan Bureau (SLB), a hire purchase company, and the Development Bank of Jamaica are providing customer credit information.

But incomplete records, which oftentimes lack the tax registration numbers (TRN) of customers, needed to indentify, match and merge credit records, are noted as one of the major obstacles in transferring the data.

Last month, the finance minister, Peter Phillips, signed an order under the Credit Reporting Act to enable credit bureaux to collect information on customers of utility companies.

For a fee, and with the consent of the consumer to whom the information pertains, prospective lenders can access information from a credit bureau to help determine their risk exposure.

At this point, credit reports are not just being used to determine if someone gets credit or not, it also influences the type of credit that they get.

The use of credit reports in Jamaica is not too far from where it ought to be. Within a year or two, the country should reach a level where the reporting of information to credit bureaux and the use of such to design credit facilities and assess risk will be common practice.

The utilities have all indicated their willingness to report customer information. They appear to have just had discussions about the requirement thus far.

Already, some borrowers in the personal loan market have been adversely affected by reports from credit bureaux, according to the Bank of Jamaica credit conditions report.

A reduction in the approval rate of secured credit from lenders over the December 2013 quarter has been linked to increased screening due to the operations of credit bureaux, according to an earlier version of the same report.