Negative BKR codings can affect your financial future for years. You try to apply for a loan, arrange a mortgage, or take out a phone subscription and you are faced with a rejection due to a negative code at the Credit Registration Bureau (Bureau Krediet Registratie, BKR).
But what do these codes actually mean? And are they always justified? This article explains all negative BKR codings, so you know exactly where you stand and what steps you can take.
How does the BKR coding system work? The Bureau Krediet Registratie (BKR) uses a system of codings to indicate the status of a credit. Each coding says something about how the credit is progressing. As long as you pay your instalments neatly on time, your registration has no negative coding and does not pose an obstacle. Only when payment problems arise are negative codings placed that are visible to other lenders.
It is the lender, such as your bank or leasing company, that is responsible for placing codings. BKR itself does not enter codings but manages the register. If you disagree with a coding, you must therefore turn to the lender who placed the coding, not to BKR.
Overview of the negative BKR codings
BKR has different types of codings, each reflecting a different situation. The most important negative BKR codings are explained below.
Arrears code (A code)
The A code is the most common negative BKR coding. This coding is placed when you have fallen into arrears on your credit. The lender is obliged to warn you in advance that an arrears notification will be placed if the arrears are not cleared. The A code indicates that there is a current payment arrears and signals to other lenders that there are payment problems.
Special code 1
Special code 1 is placed when a payment arrangement has been made with the lender. This may mean that, in consultation with the bank, you have agreed on a lower monthly repayment because you could no longer meet the original instalments. Although a payment arrangement is a positive step, it is recorded as a special code and is visible to other lenders.
Special code 2
Special code 2 indicates that the credit has been terminated because you did not meet your obligations. The lender has called the remaining amount due and payable in one go. This is a more serious coding than the A code and indicates that the normal credit relationship has been terminated due to default. In many cases, after acceleration the claim is transferred to a debt collection agency or bailiff.
Special code 3
Under article 13 of the Algemeen Reglement CKI, special code 3 means that the lender has written off an amount of € 250 or more. Writing off is an accounting step: the lender removes the claim from its own books. That is not the same as cancelling the debt. If you genuinely no longer owe anything (final discharge), the lender reports the end of the agreement with an actual end date at the same time as code 3. If that end date is missing, there is no final discharge: you still owe the amount and it can still be collected, or the claim may have been transferred to a collection agency. Always check whether an actual end date was reported — that single detail determines both your payment obligation and when the registration disappears.
The codes have no fixed order of severity. How much weight a lender gives to a code depends on the code itself, the amount, the date and your current situation. Whether you can obtain new credit is decided by the lender under its own acceptance policy; there is no fixed outcome.
Recovery code (H code)
The H code, or recovery code, is actually a positive development. This coding is placed when you have fully cleared a previously recorded arrears. The H code replaces the earlier negative coding and indicates that the payment problems have been resolved.
Despite being a recovery notice, the registration, including the original negative coding, remains visible for a certain period.
How long do negative BKR codings remain? The duration of a negative BKR coding depends on the type of coding and the circumstances. In general, registrations are removed five years after the end of the credit. This means that if you repay a loan in full, the registration, including any negative codings, remains visible for another five years. When an arrears notification has been resolved, the H code is placed, but the registration also remains visible for the regular period.
It is important to realize that these periods are not set in stone. In certain cases, the registration period may be considered disproportionate, particularly if the consequences of the registration are not in proportion to the seriousness of the original payment problems. A judge can then decide that the registration must be removed earlier.
Consequences of negative BKR codings
Negative BKR codings have far-reaching consequences for your financial possibilities. The impact goes beyond just obtaining loans and mortgages.
Rejection of credit applications
The most direct consequence is that new credit applications are rejected. Banks and lenders consult BKR before making a credit decision. A negative coding is for many institutions a reason to reject the application, regardless of your current financial situation. This applies to personal loans, revolving credit, credit cards, and car loans.
Problems with mortgage applications
A negative BKR coding can make it impossible to obtain a mortgage.
Mortgage lenders apply strict acceptance criteria and a negative coding is often a direct ground for rejection. This can have enormous consequences if you want to buy a home or refinance your existing mortgage on more favorable terms.
Consequences for renting and subscriptions
More and more parties consult BKR when entering into agreements. Landlords, telecom providers, and leasing companies can request your BKR registration and, on that basis, decide not to enter into an agreement with you. A negative coding can therefore also have consequences for matters such as renting a home or taking out a phone subscription.
When is a negative BKR coding unjustified?
Not every negative BKR coding is justified. There are various situations in which the coding can be challenged. The lender may have made a mistake when registering the arrears. The prior-notice procedure may not have been followed correctly. The underlying claim may be disputed. The coding may be disproportionate given the circumstances. Or the payment arrangement you agreed may have been recorded incorrectly.
In all these cases you have the right to challenge the coding with the lender and, if that produces no result, with Kifid (the Dutch Financial Services Complaints Institute) or in court. It is advisable to check your BKR overview regularly so that you can detect unjustified codings in time.
How can you have a negative BKR coding removed? The removal of a negative BKR coding follows a fixed procedure. You must first lodge an objection with the lender who placed the coding. If the lender rejects your objection, you can file a complaint with Kifid. If that also does not lead to the desired result, you can initiate court proceedings. At each stage it is important to substantiate your objection with evidence and legal arguments.
The role of prior notice
Before a lender may place a negative BKR coding, they are obliged to inform you of this in advance. This prior notice gives you the opportunity to pay the arrears after all and thus prevent the coding. If the lender did not send prior notice, the coding may be unjustified on procedural grounds. This is a commonly used and effective defense when challenging negative BKR codings. Therefore, always keep all correspondence from your lender so that you can demonstrate whether or not you received prior notice.
The role of prior notice
The effect of multiple negative codings In some cases your BKR registration contains multiple negative codings for the same or for different credits. The cumulative effect of multiple negative codings is significant.
Each individual coding is taken into account by lenders in their assessment, and the overall picture can lead to an even stricter rejection than would be the case with a single coding.
If you have multiple negative codings, it is advisable to assess each coding individually. It may be that one or more codings were placed unjustifiably, while other codings are justified. By having the unjustified codings removed, you improve your creditworthiness, even if other codings remain. A lawyer can help you set priorities and challenge the most promising codings first.
BKR codings with business credits
Entrepreneurs who have taken out business credits in their personal name can also face negative BKR codings. This can be problematic because business payment problems directly affect your personal BKR overview. If your company is temporarily in financial difficulties but you are creditworthy as a person, the BKR coding can give an unfair picture of your actual financial situation. In such cases, too, it may be worthwhile to have the proportionality of the coding assessed.
The relationship between BKR codings and other registers Besides BKR, there are other registers that affect your financial profile, such as the Central
Information System (CIS) and the External Referral Register (EVR). It is important to know the distinction. BKR specifically registers credit data and payment arrears on loans. The
CIS and EVR register incidents and irregularities that are broader in nature. You can be registered in several registers at the same time, which amplifies the consequences. A lawyer can help you obtain a complete overview of all your registrations and determine, for each registration, which approach is most effective.
State-funded legal aid
Challenging negative BKR codings may require legal assistance. If your income is limited, you may be eligible for state-funded legal aid via the Legal Aid Board (Raad voor Rechtsbijstand). With a toevoeging (legal aid grant), most lawyer’s fees are paid by the government and you pay only a personal contribution. This makes professional legal assistance accessible to you as well.
Have your BKR coding assessed
Negative BKR codings have major consequences, but they are not always irrevocable. A specialized lawyer can assess your situation, determine whether the coding was placed lawfully, and advise you on the most promising route for removal. The sooner you take action, the sooner you can restore your financial freedom.
Are you dealing with negative BKR codings and want to know whether they are justified? Contact us for a no-obligation assessment. Our lawyers will be happy to help you have your registration reviewed and, where possible, removed.
Read also
- Unjustified BKR registration: step-by-step plan for removal
- BKR recovery code
- BKR registration and mortgage
- Insurance law lawyer
