BY

Muhammad Khalil Hussain (0333-9835303)

International Islamic University Islamabad
 What it is?
It is the record of an individual’s ability to
repay debt that is based on the past
history of the person’s borrowing and
repaying in conjunction with the entity’s
availability of assents and income to pay
off future debt.

Where can you obtain your credit

rating from?
Credit Rating Agencies such as Baycorp
and Veda Advantage can provide one
with their credit worthiness value.
Since a database is a collection of related
data to a particular subject, credit rating
agencies utilise databases to record data on
an individuals credit rating details (such as
past debt, whether they are punctual in
paying off credit card debt) and personal
information that allows credit rating
companies to identify the individual.

Databases are used to store data on an entity

through the use of different fields containing
information on the individual to formulate their
credit score.
Some of the data included in a
credit rating database for an
entity are:
 Full Name
 One’s interest charged
 Debt that needs to be paid
(This is amount of money
needed to be paid for its use.)
 Amount of credit used
(This is amount of money used
from borrowing)
 One’s saving patterns
(This is person's abilities to save
money and repaying money)
 Rating of payment of loans
(This is in percentage, if its high
then you have more spending
money)
  Someone can use previous good credit rate for
before and bank would still let them borrow if an
agency’s credit rating database is not up-to-date.
 A person managing credit rating databases may
give away a client’s personal details to a individual
or organisation without the client’s information.

 A employee from a credit rating agency may fool

 Repair clinics have been set up to help one with
“Lugi wants to know if
you the manager of the
credit rating database,
could fix a few minor
details on his account”
an individual to provide personal details that are
not necessary to formulate one's credit score.
bad credit rating. These so-called clinics offer to
help you clean up your credit by using loopholes in
the law that only they know about. They may also
promise to remove negative information from your
file or to get you a major credit card. These are
false promises.
WHY?
Under the Federal Privacy
Act 1988, credit rating
agencies (they manage the
databases) MUST ADHERE
TO A STRICT CONDUCT. If
conduct is BREACHED,
PENALTIES OCCUR.
LEGAL OBLIGATIONS
♦Those who gather information to produce a record on a entity are forbidden to
obtain personal information in one’s credit information file unless that type of
information is reasonable essential to identify the individual.

CREDIT RATING
NAME: JOHN CITIZEN
PERSONAL INFORMATION:
• Medical History
• Criminal Record
• Physical handicapcy
• Political beliefs
• Religious beliefs
• Race and ethnic origins
LEGAL OBLIGATIONS
♦ Those in charge of modifying databases in credit rating agencies must make
sure information on a individual is up-to-date, accurate and not-misleading.

Eg: Sally-Anne paid off her credit card debt 6 months ago, when she
approaches Commonwealth Bank to get a loan, they inform her that her credit
worthiness is not upto the standard the bank requires to lend out a loan.
The inability for a credit rating agency to update their record has left Sally-Anne
unable to obtain a loan.

Commonwealth Bank

To: Sally Ann

Loan: $15, 000

LEGAL OBLIGATIONS
<> Must secure database against unauthorised access, loss
of data and misuse of data.

If this occurs, the Privacy Commissioner (that regulates credit

rating agencies) can give out penalties such as fines
and criminal records.

CREDIT SCORE AGENCY

<> Not allowed to disclose

personal information to either a

person or organisation other than the individual

who’s credit worthiness is measured and those who

have received permission to access from the

“Mr. Howard has a bad credit individual.
rating score – pass it on!”
ETHICAL OBLIGATIONS

♦We live in a society that believes in a high standard of morality. In this society
those managing the databases in credit rating agencies have responsibilities to
carry out their work justly to the information they withhold on others. Many of
these responsibilities are relevant to their legal obligations:
♦ They have a right to provide confidentiality among the individual
and themselves by not leaking out the personal details to another
person or organisation unless the person who desires to observe
the information has proper authority and individual’s consent to
view.

CONFIDENTIAL

ACCURAT
E

♦ They must assure that one’s credit rating is accurate.

What is Credit
Rating?

How are Khalil Awan

Databases MBA
Involved in International Islamic University
Credit Rating? Islamabad

What are the

types of data
stored about
individuals in a
credit rating?
 What are the
ethical
responsibilities
of those
KHALIL AWAN
managing credit
rating
databases?