Jamaicans who settle overdue debts may have to wait longer to repair their credit profiles, as paying off arrears does not erase the record of previous late payments, credit bureau representatives have warned.

“If you do pay off that outstanding amount, the information prior to you paying off the facility, that information would still remain on the credit report,” said Oraine Potopsingh, business development representative at EverydayData.

Speaking at a JN Financial Academy Smarter Credit forum, Potopsingh explained that when an account falls into delinquency, a credit report can show the amount overdue and the number of days the borrower is behind on payments. He encouraged consumers to check their credit reports and ensure that payment information is accurate. Keeping payment receipts or confirmation from the financial institution can help borrowers address discrepancies between their records and the information on their reports.

“You have made payments, but the history is still there showing your delinquency, so it’s important to make payments on time and in full,” Potopsingh said.

Keith Parkes, senior business development manager at CRIF Information Bureau Jamaica, said a late payment recorded on a credit report does not automatically rule out future borrowing, as lenders use the report as one of the tools to guide their decisions.

(From left) Keith Parkes, senior business development manager at CRIF, and Oraine Potopsingh, business development representative at EverydayData.

“The fact that you would have made payment, even though it was late and the report is saying that you made a late payment, is not the end-all be-all,” Parkes said.

For credit card holders, Parkes recommended making at least the minimum payment to reduce the risk of missing a payment.

“Once you miss a payment, this can highly impact your credit score, so what we recommend is that persons at least make the minimum payment on the credit facility,” Parkes said.

Borrowers who repay loans through salary deductions may also fall behind when their loan repayment dates do not align with their employers’ payroll cycles. Karon Lewis, acting business relationship and sales manager at JN Bank, recommended contacting the lending institution to request a change in the payment due date so that it aligns more closely with the borrower’s salary date. Lewis also suggested maintaining a payment buffer or paying an instalment in advance to reduce the risk of falling behind.

Paying off debt is an important step towards better financial management, but it should not be confused with erasing the history of how that debt was handled. For anyone planning to apply for a car loan, mortgage or other financing, checking the report early can help identify problems before they become obstacles to approval.