Roskoshestvo advised taking out a small loan to improve your credit history
Due to a bad credit history, banks may not issue a new loan, warns the financial expertise center of Roskachestvo. However, there are several ways to correct the situation and improve performance if you need to get another loan. Advice from the organization’s specialists is in the Lenta.ru material.
Credit history is an important indicator that influences the decision of financial institutions on whether they will issue a new loan to a client or not. Information about the borrower is collected not only by banks and microfinance organizations, but also by credit cooperatives, investment platform operators and leasing companies. They are required to send this data to at least one credit history bureau (BKI), Roskoshestvo noted.
How does your credit history deteriorate?
“Sometimes credit history deteriorates due to an error in the BKI. For example, the bank did not transmit information about a closed loan to the bureau on time, or the credit histories of two namesakes were mixed up. But most often the borrowers themselves are to blame for the strangulation of CI. One late payment can immediately lead to a deterioration in your credit history. Then the borrower, for example, having found himself in a difficult life situation, does not contact the bank, but “forgets” about the debt. This will significantly worsen his credit history,” the organization said.
How to improve your credit history
Banks will most likely refuse to issue loans to borrowers with a bad credit history, Roskachestvo notes. The situation can be improved if all debts are paid off.
This is the main and first step. All overdue loans must be closed, and the number of existing loans must be reduced. If you have credit cards, it’s also better to give them up for a while until all debts are paid off
“If some old loans cannot be repaid immediately, it is advisable to contact the bank for restructuring. This will reduce the debt load – increase the loan term, but reduce the monthly payment. And this will help avoid delays,” experts advised.
Another option is to buy something in installments and pay the money on time. Information about payments for such goods is displayed in your credit history. Russians can also use the service of a “credit doctor”.
“This is a relatively new banking product aimed specifically at clients who want to improve their credit history. In this case, you pay for access to credit, but do not receive money. You are required to make regular payments over several months to show the bank your good intentions and solvency. If there are no delays, the bank will issue a real loan for a small amount. This way you improve your credit history and get access to new loans and credit cards,” explained Roskachestvo.
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It may also be helpful to get a credit card with a low limit. You can get it even with a bad rating, because the refusal rate for such credit cards is low. If there are no problems, the bank will increase the limit.
“For borrowers with a bad credit history, the bank can approve a loan secured by property. This method should be used with extreme caution, since failure to repay the loan may result in the loss of real estate,” the organization noted.
If possible, it is worth opening a deposit and regularly depositing money into it.
The bank account itself will not affect your credit history. However, it will show the borrower’s solvency and regular cash flow if you replenish the deposit
How not to improve your credit history
You should not trust dubious organizations that offer to help correct your credit history, Roskoshestva warned. There are no legal methods to cancel it.
“Scammers may offer to delete information about overdue and unclosed loans, completely clear credit history, temporarily freeze credit information, referring to “their people” in credit history bureaus or banks. This is how scammers ask for an advance payment for obtaining and “correcting” a credit history, and then either disappear completely or send a fake screenshot of the credit history, while in fact the credit history in the BKI database remains the same,” the recommendations say.
Earlier, Russians were told about a comfortable level of income to repay their mortgage.
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