If you have taken out a loan at least once, then you have a credit history. If you did not take it, then it is still there, but you will see only “zero”.
With your consent, it is stored in the credit bank. Based on your credit history, a personal credit score is calculated. The higher it is, the more chances the borrower has to get a loan on the best conditions for himself.
What does a credit report consist of?
- First page: and of course, it contains your personal information (such as: name, date and place of birth and passport details)
- Main part: information about loans, outstanding balance, presence or absence of delinquencies. You can also find information about your credit score here. The higher the score, the easier it is to get a loan. The individual credit score is calculated by the banks themselves based on their own methods.
- “Closed” part: who issued the loan and who requested your credit history.
- Informational part: where did you apply for a loan, as well as on what application and why you were refused. “Signs of default” are also recorded here.
What to do if your credit score is low?
- Check your credit history for mistakes and inconsistencies. Errors may arise due to the provision of incorrect information by the bank. To correct inconsistencies, apply to the bank that provided incorrect information, or directly to the credit bureau with a request to make changes based on supporting documents.
- The most common method for improving your credit score. Take a small that you can easily payback, in order to improve the quality of your credit history. Pay off your loan in a disciplined manner and meet deadlines. Your credit history will show a green mark and fresh entries that increase your credit score. Checking your credit history and credit rating regularly helps to eliminate mistakes, as well as keep your budget and reputation from scammers and a loan that you did not take out.
In some countries, the credit rating is influenced not only by the discharge of debts to banks, but in general by the payment culture of a person. It takes into account, for example, how he pays for an apartment or mobile communication. So the main thing not to forget is to pay your debts and your credit score will be always high.
Written by Bader Albader, market researcher.