The ABCs of Colombia's Credit-Reporting Fresh-Start Law (Part III)


Note: this article was originally published in 2021 and is kept here as a historical reference; the special amnesty it describes has already expired.

What other benefits would the law include once signed?

Debts under 15% of the minimum wage ($136,279 COP) would receive two notices before being reported negatively, with 20 business days required between them.

Victims of identity fraud would only need to submit a notice and a copy of the police report to have their negative report removed.

Credit bureaus would have to build digital tools so data subjects can access their credit information for free through every channel, without the inquiry itself lowering their score.

Checking credit bureaus to decide on a job offer would be banned, except for employees in the financial and cooperative sectors.

Credit bureaus would have to build a free, publicly accessible digital app for all data subjects, generating alerts whenever a new obligation is taken on — to help reduce the risk of identity fraud.

A user's credit score would have to normalize immediately once the negative report is removed. Currently, if someone falls behind, their score drops, and even after paying, their score doesn't recover.

The credit history of individuals and businesses is preserved, for both good payers and bad payers alike.

Credit bureaus would have to build mechanisms so this removal happens automatically, immediately, with no paperwork and no intermediaries.

The amnesty can only be used once. Anyone who has already paid their debts and is still reported to credit bureaus can come off the negative record after six months of having been reported — as long as they catch up within the first 12 months the law is in effect.

That said, if someone paid off their debt three months before the President signed the law, they would only wait three months. Those who paid six months or more before the President's signature would be removed from the report as soon as the law takes effect. The requirement is that they must have appeared on the report for six months.

This benefit applies both to people who pay off overdue installments and to those who renegotiate their debt or whose obligations have already expired under the statute of limitations.

As soon as a credit obligation is extinguished, every data subject's negative report must be erased automatically, the moment the deadlines set out in the law are met.

It applies to all types of debt: utilities, banks, credit unions, general retail, mobile phone service, and home services.

It makes no difference whether the debt was incurred more than 10 years ago or just a year ago. All of them can qualify for amnesty.

SOURCE: Draft bill and Constitutional Court Press Release 032 of 2021

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