How to Improve Your Credit Score?
It is often offered to improve credit history on the Internet for a price. Remember: it is impossible to do this with the help of unknown intermediaries, therefore you cannot trust such services. In the article we’ll tell you how you can influence your credit score.
What is a credit history?
A credit history is a profile that contains the history of your credit relations with financial institutions. In other words, this is information about how many loans you had, and how disciplined you paid them. Such a profile is started at the time of the first loan issued. When processing a loan application, banks analyze the credit history of a potential borrower and co-borrowers. The credit history is stored in the credit history bureau for 10 years from the date of the last change in the information contained in the credit history.
How is a loan decision made?
The decision to approve for a loan is made individually, but, as a rule, the bank has several main reasons for disapproval: poor credit score, excistence of other loans, insufficient income or information provided by the client were not confirmed by the bank.
How to affect your credit history?
There is only one way to really affect credit score whether a person pays loans on time. Therefore, if you have current delays, repay them as soon as possible, and in the future try to repay loans on time. For banks, this is one of the main criteria when processing applications.
As a rule, the bank does not explain the reasons for the refusal to issue a loan, including mortgages. To increase the possibility of loan approval, we recommend that you do the following before submitting a new loan application:
- if you have a credit card – check that it is good enough to be approved for a loan;
- make sure you do not have past due debts on other loans;
- if you are the current guarantor of another person’s loan, make sure that the lender pays it regularly;
- check that you do not have other factors that may affect your creditworthiness (fines, violations).
- you can also book a report on your credit history to independently verify the data.
This inforation is provided, first of all, by premier banks. Address your banking institution whether they can check your credit history.
What else is important to know?
To increase the likelihood of approval, we can recommend paying off existing loans and closing credit cards, if you have any, or lowering the limit on them. Keep in mind that credit repayment information is updated in the credit bureau for approximately 10 days. We also recommend checking:
- validity of the ID and other documents provided by you at the time of application;
- arrears on existing loans or credit cards;
- fines or taxes due;
- bankruptcy Information;
- public trial.
In the presence of these circumstances, we recommend eliminating them: pay off debts, fines, enforce court decisions, and close court proceedings.
The credit policy of any bank changes from time to time. So the bank can change its decision. If you were disapproved for a loan, you can file a new application for the same type of loan in about two months.