Borrowers’ credit histories are kept in specially created bureaus. They are responsible for the safety, protection, and reliability of the information. Banks themselves choose the organization for storing data. Therefore, before ordering a credit history report, the user must find out which Bureau he would like to get it.
There are three credit agencies: TransUnion, Equifax, and Experian. When you apply for a loan, request an increase on your credit limit, or even apply for a new job, your credit report will likely come into play.
Bad credit history is one of the most common reasons for a bank to refuse a loan, and it can be harmful, even if you have never taken out a loan in your life. This article will tell you how to fix your credit history and spoil it again.
Changes in your credit history are directly related to the availability of debt obligations and their performance. Deterioration occurs both through the fault of the individual himself and through the bank’s fault or as a result of fraudulent actions. Let’s consider these reasons in more detail.
The rating of a potential borrower will be downgraded if within the last ten years:
1. Allowed delays in loans and borrowings. The actual delays, when the delay in payment was due to the borrower’s fault, and technical delays associated with the delay in crediting funds to the account due to failures in the bank’s program, are essential.
2. You often applied to microfinance organizations. This indicates an unstable financial situation and the need for external sources of funds, including repaying the principal loan at the bank.
3. Has a lot of refusals for loan applications in different banks. Each denial has a reason, and if the causes are not eliminated, each new appeal will lead to further rejection and worsen the credit score.
4. Has outstanding debts due to court decisions. Regardless of whether you pay off debts on time or are in arrears, claims can be a marker of non-fulfillment of some rental obligations, for example, which reduces your reliability.
5. Did not take loans, did not use a credit card, and did not even apply. On the one hand, this may indicate a stable financial situation – a person does not need borrowed funds. But on the other hand, it may be the result of a young age, lack of a permanent place of registration and work: an individual realizes that he will not be given a loan or a card and therefore does not apply to the bank.
How to Improve your Credit Score?
It is possible to correct information in bad credit history. To do this, you need to improve the level of your financial discipline, if the reason is this, or find factual errors and eliminate them. Consider ways to help improve your credit history to increase your chances of loan approval.
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