The BKR and its codes explained in more detail

Let's start at the beginning: what does BKR actually stand for? The BKR stands for Bureau Krediet Registratie. The BKR is a foundation that registers personal data in the Central Credit Information System, the CKI. So basically, they are just a big repository for consumers' personal data.

The BKR was created to protect the financial sector from defaulters and to protect consumers from over-indebtedness. The purpose is thus twofold. Lenders are affiliated with it because they are required to do so under the Financial Supervision Act.

How does removing a BKR code work?

Is everyone registered with the BKR?

At the end of 2020, 8,800,000 people were registered. So not everyone is registered. These are consumers who have taken out an expiring or revolving credit, gone through a debt settlement process, taken out a shipping house loan, mortgage loan, car lease agreement or other financial obligations.

In other words, it is roughly about a consumer's agreements with lenders. Debts with government agencies, for example, are not registered. Also, these are not all negative BKR registrations. In fact, a distinction is made between a positive and a negative BKR registration.

A positive BKR registration has no codes and in most cases is not an obstacle to applying for credit or a mortgage. A positive BKR registration from a debt settlement, however, can cause problems. In most cases, negative registration is a hindrance.

What exactly is a negative registration?

A registration is negative when it has codes attached to it. This distinguishes between an arrears code (A), particularity code 1, 2, 3, 4, or 5, and a recovery code (H).

Code A

The A stands for arrears. This means that you have not met your obligation to pay for a certain period of time. How long this period is varies by credit. Want to know what the allowed period for arrears on your credit is? You can look this up in the general regulations of the BKR.

Code 1

Code 1 means that you have made a payment arrangement. Generally, then, this is a "positive" negative coding because it makes it clear to other lenders that you have been contacted and an arrangement has been made that you have complied with.

Code 2

Code 2 means that the entire credit has been claimed and thus the lender is recovering the entire amount lent. This must be preceded by a notice of default and often takes place with the transfer to the collection agency.

Code 3

Code 3 means that an amount of 250 euros or more has been written off. So if you agree to final discharge and the lender has to write off more than 250 euros, you will be registered with a code 3. We have noticed that lenders also write off internally when they transfer the claim to a collection agency. It is therefore best to avoid this, because even if you pay the debt after this, many lenders leave code 3. They argue that the difference in the dates of the code 3 and the end date can be seen as not being final discharge.

Code 4

Code 4 indicates that you have been unreachable by the lender. For example, mail has been returned to the bank or you have not been able to be contacted in any way.

Code 5

This code means that the lender and you agreed on a written preventive payment plan for a mortgage loan agreement of at least four months. We encounter this coding infrequently.

The H

The H stands for recovery. This means that you have recovered your arrears.

For example, an A4 coding means that the bearer of the registration was contacted, but the lender did not receive a response. In addition, it concerns an A coding which therefore means that payment delays have occurred.

What are the consequences of such a negative BKR registration?

A negative BKR code in many cases hinders your application for a loan or mortgage. Each lender is free to enter into an agreement with you, but most lenders will refrain from doing so if you have a negative BKR code. It should be noted here that some codes are "more severe" than others. As already indicated, a payment arrangement made is a positive circumstance, and recovery coding also presents a somewhat more positive picture.

How do I become code free?

When you have paid the entire claim or the amount in final discharge, you will be given an end date. After this date the registration will remain for five years and then it will be automatically deleted. If you have a code H then this date will be looked at. After all, you recovered the arrears then. If you get another code after that, the end date will be looked at again.

Either way, five years is a long time to have to wait, especially when it comes to not being able to buy a home or make another investment. That's why we're here to see if there are opportunities to get you code free and give you a future again. Are you wondering if we can be of service to you? Then contact one of our consultants without obligation.