Can you buy off a BKR registration?

When you are dealing with a BKR code, it can get in the way of your life in an ugly way. For example, getting a mortgage can be difficult. If at all successful, the maximum amount you can borrow often falls short. So if you are in the market for a new home, it may make sense to ask yourself, "Can you buy off a BKR code?"

In this article, we discuss what your options are in this and what you should think about.

In this article:

• The type of coding and redemption
• Buy off positive BKR registration
• Practice example repaying positive BKR registration
• The code remains after this
• Code A BKR listing buyout
• Note Code 3
• Mediation by Dynamite Netherlands
• Removal of BKR registration after redemption
• Possibilities of "buying out" a Code 3

How does removing a BKR registration work?

The type of coding matters for redemption

First, it is important to understand the difference between the BKR codes you may face. For example, loans and credits you take out are recorded as what is known as a positive registration.

When you fall behind on payments, it turns into a negative credit rating. This is also called a arrears report and is reflected in your credit report as an "A" by the credit extended.

It is mainly those negative BKR registrations that affect taking out a new (business loan) or mortgage, but a positive registration can also have an impact.

We discuss both cases separately below.

Are you in doubt about whether you have a BKR registration? Then first read how to find out if you have a (negative) BKR registration.

Paying off a positive BKR registration

As mentioned, a positive BKR registration indicates that you have taken out a loan or credit with a lender. Registered factors include:

• A personal loan or credit over €250.
• Purchasing with a credit card
• Being in the red in the bank account
• A private lease
• A phone subscription with a phone over €250

On the payment of that credit, you have not been in arrears. Thus, for the possible new lender, a sign that you have always paid neatly on time. Still, even such a positive registration can affect, for example, the maximum mortgage you can get.

After all, for the mortgage lender, it does signal that you have other payment obligations. And that it therefore becomes more uncertain whether you can always pay the required monthly repayment.

In this case, therefore, it may be a good idea to buy off the BKR registration, simply by paying off the outstanding debt or loan.

Practice example for buying off a positive BKR registration

Suppose you have €1000 in your bank account in overdraft. This often happens towards the end of the month, when you have just made a big purchase and are waiting for your salary to be deposited. Normally, then, no cause for concern.

But when you are about to take out a mortgage with BKR, it does have an impact.

This means you can get €6500 less in mortgage (factor of 6.5 on the outstanding loan or debt). Quite an impact, then, when that could make just the difference between being able to finance your dream home or not.

Therefore, if you do have enough money behind you in your savings account, it may be very wise to "buy off" this overdraft by closing the gap in your bank account.

How the coding remains after this anyway (and why it doesn't matter)

Note: In a sense, this is not buying off the positive BKR code. Here's the thing.

A BKR code remains - after paying off the debt or loan - for five years. However, the code will then state that it has been closed, or in other words that you no longer owe money.

Thus, even after you pay off the overdraft from the example above, your credit report will continue to list this overdraft for five years. However, by paying off the amount owed, a new lender will see that there is no longer a fixed claim on your monthly income.

Still want to get rid of this registration sooner than in the regular five years? Then contact us and find out how we can help you.

Paying off a Code A BKR code

What about Code A BKR coding, or credits, loans or debts on which you are in arrears?

As mentioned above, the arrearage creates an arrearage notice (A) on the record in question in your credit report. Have you caught up with the payment arrears, but the credit continues? If so, this is supplemented by a recovery notice (H).

Furthermore, the same applies to the ordinary course of business as with the positive BKR registration described above. That is, - after you have repaid the entire credit - the arrears notification, the recovery notification and the notification that the credit has been terminated will remain visible for five years.

The BKR registration is therefore not bought off with the closure of the arrears. In fact, even after you have repaid the entire loan, it will remain visible to future lenders that you were in arrears.

This can make it more difficult for you to get a mortgage, (business) loan or lease, for example.

When the full amount has since been repaid and the registration is thus closed, Dynamite Netherlands can help you remove this BKR registration. Especially when it is demonstrably interfering with your life.

Of course, it is more complicated when the arrears are still active. Many people wonder if it is possible to buy off the BKR registration even in these cases, but in practice this is often difficult.

Consider Code 3 when buying out your registration

In fact, buying off a BKR registration with a late payment (Code A) notation, often comes down to making an arrangement with the lender.

After all, you are unable to buy off the arrears by paying them back.

In this case, buying out the registration amounts to agreeing with the lender to repay a certain amount of the outstanding debt. In exchange, you get the remaining amount waived. For the lender, this can be a way to still get some of the money back because they do not trust that the full amount will still be returned.

This leads to a so-called code 3 listing, with an end date because the financial obligations on this credit have ended.

A code 3 listing with no end date is also possible, when the lender has decided to do nothing for the time being to recover the arrears and outstanding credit. Here, then, there is no buyout anyway, as the credit remains outstanding.

A code 3 is considered a heavy BKR registration and it is very difficult to get rid of such a registration. After all, even though the credit was closed, it shows that you never fully met your payment obligations toward the lender.

You will understand that such a heavy BKR registration can make it very difficult to get a mortgage or loan.

Mediation by Dynamite Netherlands

Have you bought off your BKR registration by repaying the credit you owe? Then, unfortunately, its registration still remains active for five years before it is removed by the BKR.

In the case of a positive registration, this is often not such a problem. After all, you have always neatly fulfilled your payment obligations and are now no longer squeezing your monthly budget.

It becomes different in a registration where there has been a backlog and recovery notification.

In fact, as long as the registration remains visible, the same applies to the arrears notification. It can haunt you for up to five years after repayment of the loan. Annoying, when you are now financially strong, but problems from years ago still bother you.

Watch our introductory video with Mr. Frank Visser

Removing your BKR registration after it has been redeemed

In such cases, Dynamite Netherlands can help you remove this BKR registration.

On your behalf, we then mediate with the lender to try to ensure that the registration is cancelled before then. In doing so, we always put your interests and story first, because no case is the same.

Our lawyers have years of experience with this and process various files on a daily basis. As a result, our specialists are perfectly capable of defending your interests efficiently and clearly.

To properly assess your situation and determine if and how we can help you. we always begin with a free, no-obligation intake interview.

In it, we will discuss with you the options, based on your circumstances and wishes.

Have you run into a Code 3 listing in the past? Perhaps it can still be redeemed

We warned above about the Code 3 listing, which indicates that you have reached a settlement with the lender.

As mentioned, it is incredibly difficult to get rid of this. After all, the lender has written you off part of the debt you had. Therefore, one will not be inclined to cooperate in removing the listing.

Nevertheless, we can also mediate for you in this case. For example, it is conceivable that the lender may be open to cooperating in removing the coding if you still close the payment gap.

In other words, you still pay the portion of the debt you had been forgiven, in exchange for removal of the BKR listing by the lender.

So in this way, the heavy Code 3 BKR registration is bought off. In cases where you are now (much) stronger financially than a few years ago, this can sometimes offer a way out of an unpleasant situation.

Want to know what we can do for you? Then contact us today for your free, no-obligation intake consultation.