Creditworthiness is extremely important for anyone who intends to apply for a loan. Even if today we think that we do not need loans and we do not want to finance any purchases with them, sometimes there are situations that can change this state of affairs. With credit we can finance not only pleasures in the form of a holiday trip or gifts for loved ones. Often, extra money is also useful for unexpected expenses, renovations, the need for medical treatment or when buying a property. There are so many purposes for which we can use borrowed money that it is worth taking care of your creditworthiness so that in the future – if you need a loan – you won’t have any problems with it. How to build your credit rating? All you need to do is follow a few tips to be credible in the eyes of credit institutions.
It is worth having a commitment to prove your ability to pay it back.
Very often, loan applicants are surprised that they receive a negative response from the bank, while they have never taken any loan before. However, the bank argues accordingly: the customer may have the ability, but you can not check whether he is paying. Even the purchase of small equipment in installments, having a credit card or regular repayment of the smallest cash loan can help a lot in assessing creditworthiness. It is worth remembering to shape your positive credit history.
Only what is documented is what counts.
Some loan applicants are surprised by the negative decision because of too low income. When calculating creditworthiness, income from the last few months is usually taken into account. Remember, however, that it must be fully documented income. The bank cannot consider remuneration paid without confirmation or income obtained in the shadow economy. If we want salary bonuses or allowances to be taken into account, they must also be documented and affect the bank account.
Timeliness is the key.
Even in the case of very high income and permanent employment, creditworthiness may cross the shoulder of timely repayment of previously held credit obligations. The Credit Information Bureau, to which banks send inquiries regarding our timeliness, stores information on our loans up to five years from their full repayment. If we apply for a new loan at that time, and we adjusted the previous one in an unreliable manner, the bank may refuse to grant us any amount for fear that we will do the same. Therefore, your existing obligations should be settled in a timely manner and in accordance with the contract.
Co-borrowers can help.
Building creditworthiness is very important, but if we need credit quickly and our income is not enough – people who join us with such credit can help us. Their creditworthiness will help ours, but it must be remembered that they also take responsibility for the timely repayment of the contracted obligation. Most often, co-borrowers appear when taking out mortgages. They are spouses, parents and other family members.
Reaction during troubles.
If we already have any credit products and financial problems have arisen that prevent them from being repaid – do not wait until it is too late. It is worth immediately reporting to the bank to renegotiate loan terms, ask for lower installments or new repayment terms. Thanks to this, we will avoid unwanted entries in the debtors’ registers and any wasted creditworthiness. The timeliness of paying your debts is important for the next few years, so it’s not worth waiting for banks to claim their debts. Thanks to the quick response and spreading the commitment into more convenient installments, we can wait out the difficult financial situation, while ensuring that the credit history is still positive.