How not to spoil your credit history: TOP tips for your safety
One of the most important criteria when deciding whether to issue a loan by a bank or non-bank credit institution is the applicant's credit history. If you have had problems in the past with paying off debt on time, this will leave a negative imprint on your credit history.
Credit history is all the information about the loans you have ever received and the discipline of their repayment. All your loans are collected from banks, finance and leasing companies, credit unions and other financial institutions and are stored in four departments:
Signs of bad credit and what it can lead to
The credit history is spoiled by frequent violations of payment discipline: delays, irrelevant data, the presence of legal proceedings on loans, frequent loans - all this affects the possibility of obtaining a loan in the future. Of course, each lender independently assesses the credit history, and there are still chances of getting a loan. In addition, banks have higher requirements for borrowers, and microfinance organizations are more loyal. But if everything is bad, even MFIs can refuse. In addition, some lenders may agree, but offer a loan on unfavorable terms.
How not to spoil your credit history
The best way for banks and financial companies to remain a reliable potential borrower is to maintain order in their credit history. To do this, you must adhere to the basic rules.
1. Payments must be made on time, regularly.
This is payment discipline - everything, even the smallest offenses, are recorded and leave a mark on your credit history. Do not delay payment until the deadline due, because unforeseen circumstances may arise, and the money may not be credited on time.
2. Keep payment receipts, take certificates of debt closure.
Pay attention to the amount of payments on loans, on the commission, because if the account receives an amount less than the mandatory payment, the delay will begin. Check all receipts after payment, whether it is a payment through a bank cashier, a self-service terminal or an online payment service. After the loan is repaid, take a certificate of debt closure.
3. Assess in advance your ability to repay the loan, do not take out a loan on unfavorable terms, and do not issue many loans at the same time.
4. Check your credit history periodically.
5. Contact the lender in case of any difficulties.
It is beneficial for a bank or other organization that issued a loan to you so that you remain a reliable borrower with a good credit history. Therefore, in case of any difficulties, contact the lender immediately, he can meet halfway and offer restructuring or refinancing.
How to fix bad credit history?
One of the options to improve your position in the presence of a bad credit history is to apply for a loan with a collateral or guarantor. You can also open a deposit or order a debit card and receive a salary on it. And after that, submit a request for a credit card. But the best and most effective way is to keep your credit history in order.