CRIB and Governemet servant Permit

[ashley]

Hello everyone,

 I'm suppose to get my first permit next year and my husband like to upgrade our car. But we both are new to car permit thing and both have CRIB records. May name is in CRIB because of unpaid loan and My husband is in CRIB because he was a granter for a one of his Ex-coworker's unpaid loan. We plan to buy the best car we could for cash and which is probably be in range of Toyota 141. Now we have Toyota 110

I like to know whether this CRIB situation affect my ability to

1. Import a car as other permit holders do. (Can we open open a LC if our account has money in cash?)

2. Can I sell permit so that some one else use it to import a car in his/her name directly OR does selling permit means I have to take LC in my name to import a car on behalf of the person I sell permit?

3. Any advice on CRIB thing?

4. What can I do to use permit if 1 and 2 are problematic with CRIB?

Thanks in advance and sorry if I'm giving too much information.

 

 

 

Edited December 9, 2016 by ashley

[maersk]

CRIB has nothing to do with your permit. But it'll be a different story in case you or your husband need a loan. Mind you, afaik record stays in the system for 24 (or so it 12) months even after clearing debts as well.

[Crosswind]

First of all, most of that information is not necessary.

1. Yes. Like Maersk said, CRIB has nothing to do with opening LCs and importing cars. Also a CRIB record lasts only 2 years.

2. Selling the permit means you need to import the car in your name. The buyer will sign some legal documents with you to ensure the car gets transferred to him/her. In this case, the risk is on the buyer.

3. What you should be doing is taking a CRIB report and checking your credit status (both yours and husbands). You can do it from any bank or by visiting CRIB. If there's anything you can do to clear the name, do it.

Like your husband, I was adamant not to take any bank loans and I survived without a single bank loan, lease or a credit card for years and years. But there comes a time when even adamant people may need to get bank loans to do things in life.

4. Question is not clear

[ashley]

 

1 hour ago, Crosswind said:

First of all, most of that information is not necessary.

1. Yes. Like Maersk said, CRIB has nothing to do with opening LCs and importing cars. Also a CRIB record lasts only 2 years.

2. Selling the permit means you need to import the car in your name. The buyer will sign some legal documents with you to ensure the car gets transferred to him/her. In this case, the risk is on the buyer.

3. What you should be doing is taking a CRIB report and checking your credit status (both yours and husbands). You can do it from any bank or by visiting CRIB. If there's anything you can do to clear the name, do it.

Like your husband, I was adamant not to take any bank loans and I survived without a single bank loan, lease or a credit card for years and years. But there comes a time when even adamant people may need to get bank loans to do things in life.

4. Question is not clear

Thanks for info. I will remove unnecessary details from original post. I asked this question from several people and ended up telling all that info because people always advice me to get my name clear regardless of family cost.

I thought LC means letter of credit and I cannot do any thing related to credit with banks while having CRIB record. That is the whole base of problem. Q4 is not relevant if I can import a car my self.

 

5 hours ago, maersk said:

CRIB has nothing to do with your permit. But it'll be a different story in case you or your husband need a loan. Mind you, afaik record stays in the system for 24 (or so it 12) months even after clearing debts as well.

Thanks.

 

 

 

 

 

[Quiet]

in summery if you are opening the LC against a cash deposit you will not face any problem even with a Bad CRIB. 

If you have a CRIB with default the only way to get out is settle all Out standing, obtain a clearance letter from the financial institution. However your bad repayment record will be in the CRIB report for 24 months. But some financial institutions (Excluding most banks) will grant facilities after around 06 months from clearance of CRIB. (Depend on gravity of CRIB status - terminated/Legal action Written off etc.)

As far as i know at the moment permits cant be transferred so if you sell the person who buys it will have to buy the vehicle on cash and have a power of attorney from you. So your CRIB status has no bearing on selling your permit.

Regarding your husbands CRIB, if he has furnished a personal guarantee to a co-worker which is in default status, it does not have a major bearing when financial institutions asses you for credit. However if it is a big facility compared to your salary they will raise concerns which you can go around by giving some justifications.

 

Good luck

[Sampath Gunasekera]

6 hours ago, ashley said:

 

.

I thought LC means letter of credit and I cannot do any thing related to credit with banks while having CRIB record. That is the whole base of problem. Q4 is not relevant if I can import a car my self.

 

Thanks.

 

 

 

 

 

Letter of credit means , simply buyer's bank and seller's bank do the transaction on behalf of buyer and seller respectively, when they are far away. This is the safest way to do such imports/exports.

 

[kirala2]

I'll try to clarify the situation on 3.

All financial institutions regulated under CBSL are required to report the status of the credit facilities granted by them to their customers. The data reported includes, facility status -  regular (i.e. <90 days overdue), irregular (>90 days overdue), number of days overdue, Active, Settled, Restructured; facility type (loan, overdraft, bank guarantee, LC, Import Finance...); whether borrowed under your own name "OWN" or you have been a guarantor "GRT", along with the identification details of all related parties to the loan - borrower (NIC/BR), Guarantors (NIC/BR), Co-Borrowers (NIC/BR), sometimes Directors' NICs of a company.

As was correctly stated above, the report provides the credit history of an entity (person/company) for a period of 24 months (usually 23 or 22 months due to reporting delays) so even if an overdue/NP status has been cleared 24 months ago, it would still show up in the CRIB report.

In your case, if you have CRIB issues as you have not paid your own loan, that is bad. But then again, you have not told us whether your loan is in NP (i.e. >90 days overdue), or if its only a few days overdue. Financial institutions usually have a tolerance for the number of overdue days. So generally, unless your loan is in NP, you should still be able to obtain a credit facility. However, the interest rate charged for a person/entity with a clean CRIB will likely be less than for a person with a troubled credit history. This is the case all over the world.

OTOH if you have guaranteed someone else's loan and it is in NP, this is usually tolerated to some extent by financial institutions as long as your own borrowings are in a regular status.

Contrary to popular belief, it is actually good to have a credit history (at least credit cards) then to not to have any credit history at all, as financial institutions can gauge your repayment capacity and financial discipline when you have a credit history as opposed to a person without a credit history.

I would strongly advice you to bring your own loan facility to regular status ASAP. With an irregular CRIB, the possibility for you to borrow, to become a co-borrower or a guarantor is minimal, and you actually become useless from a credit perspective. If your loan is NP, speak to the institutions concerned, explain to them why you cannot meet the monthly payments and request them to restructure the repayments in a manner you would be comfortable with given your income.

[NPP]

@kirala2 - thanks for the detailed explanation. slightly OT here, but do financial institutions here actually give better rates if we have a clean credit history? Should we negotiate hard for it and how much of a reduction can we expect from normal board rate?

[kirala2]

@NPP

Your credit history is one of the metrics used in the formula for pricing a financial product. All other things being equal, a bad credit history can add 1-2% to the average rate quoted. This would, obviously, depend on the institution concerned, but banks tend to take a more serious look at the credit history than finance/leasing companies.