Each borrower has a credit history immediately after arranging the first loan. Credit history can be positive and negative. If the borrower repaid the loan payments on time and fully repaid the loan, then his credit history is considered positive.
In those situations where the borrower was unable to repay the loan for any reason, a bad characteristic appears in his peculiar credit report, in other words, his credit history becomes negative. How to fix a credit history will be written in this article.
The main violations of borrowers
After certain violations, the credit history does not always become bad. There are three types of violations by which banks classify the solvency of borrowers:
- the only delay in the next payment, which does not exceed the term of five days, is the norm;
- repeated delay, which occurred several times, but its term did not exceed 35 days - an average violation;
- a borrower's refusal to repay a loan payment is a serious violation.
In the third option, the borrower who wants to get a new loan will have to think about how to correct his credit history.
Violations are not always caused by the fault of the borrower. Sometimes even bona fide customers who repay payments on time may have difficulties. For example, one day before the delay, the borrower sent the payment, but the bank delayed the money for another two days. In this situation, the client has a violation, albeit a mild one.
How to find out your credit history?
In order to understand how to fix a credit history, you must first know it. When planning to get a new loan, clients usually go straight to the bank. Next, managers make a request for a credit history and make decisions based on the results. Even if the borrower is confident in his positive history of bank loans, so as not to get into an unpleasant situation, he still needs to know his history of loan payments in advance. Or, if the bank has already refused the client a regular cash loan, it is necessary to find out the reason for the refusal.
Credit histories are kept in specialized bureaus, but the most complete information is in the Central Bank of the Russian Federation in the Central Catalog of Credit Histories. According to the law, every citizen once a year has the opportunity to check his or her credit payment history.
This procedure can be performed at any nearest credit bureau. You will need to have an identity document (passport) with you, and you will also need to fill out a special application.
Check History Online
If it is not possible to personally go to a specialized bureau, then you can check your credit history using the Internet. To do this, go to the website of the company providing this type of service and send them the following documents:
- scanned copy of your passport;
- copy of the document confirming registration;
- in the letter indicate personal data (name, series and number of the passport, by whom and when issued, place of registration).
Next, you will need to pay for the service.
If the result came before applying to the bank, and it turned out to have a damaged credit history, how to fix it can be considered and there will be a chance to get a new money loan.
How do banks get credit history?
In the past, when the total number of loans was small, each major bank had its own customer credit database. They were reluctant to share it.And in order to receive a request for history from another bank, whose client you are not, you had to go through unofficial ways.
With an increase in credit transactions and a proportional increase in overdue loans, a need for a single base has appeared.
Credit bureaus began to be created. How to fix them, after detecting a negative picture of credit payments, the bureaus do not inform, but based on the results obtained, the borrower can evaluate the cause of the bank’s refusals and make the right decision to improve his financial reputation.
The most important thing that banking organizations are interested in is the availability of loans in other banks, their size and the presence / absence of delay.
The bank receives all these data from the credit bureau and checks with the data of its customers.
Most banks lower interest rates for customers with a positive credit payment history, therefore both parties are interested in timely payments, so that later they won’t wonder how to fix their credit history.
If the credit history is damaged
If, nevertheless, for some reason it was not possible to maintain a good credit reputation, but there is a need for a loan, borrowers begin to wonder if it is possible to correct the credit history.
There is always a chance to renew a borrower's positive reputation if it is insecurely damaged. Of course, in cases where a citizen is declared bankrupt, not a single bank will give him a loan. But if there were delays in payments or even a single non-payment of a loan, the bank may make concessions and give out a loan.
Before the crisis of 2008, most banking organizations did not attach much importance to the solvency of their customers. However after world crisis the issue of creditworthiness has become one of the main ones, and at present, more preference is given to clients with a positive credit history, which there is a chance to fix.
How to fix your credit history?
In order to know how to correct a credit history, it is necessary to understand some criteria by which a bank evaluates the solvency of customers.
If a citizen wants to get a loan, then he relies on his own strength and his income allows you to pay a bank loan.
Accordingly, in the presence of old debt, the borrower must first pay off the debt, thereby improving his credit history.
Many banks give loans to customers with bad credit history, if they, in turn, open them deposit account. Such an account serves as a guarantee of loan repayment.
If a borrower with a negative credit repayment history has a violation through no fault of his, then he will need to provide evidence that this violation was committed for reasons beyond his control.
There are also cases when, due to errors in documents due to the fault of a bank or credit bureau, the borrower has a bad credit history. How to fix it in this situation? It is enough to notarize a statement in which the discrepancies are indicated, and submit documents to the bank where the client wishes to apply for a loan.
Typically, in such cases, banks independently correct errors that are deemed truly perfect and send corrected documents to the credit bureau. Accordingly, the borrower is restored to a positive credit reputation.
Do-it-yourself credit history correction
For example, a potential borrower knows that he has a bad credit history. How to fix it yourself and get a new loan in the future? It’s enough to take a small consumer credit. Microfinance organizations usually issue their clients without problems even with a negative history.
Then repay loan payments on time, without violating the deadlines. After successfully repaying one loan, you can issue another one as small (for example, for household appliances).After repayment of two or three loans, the borrower has a positive reputation, and banks are likely to issue a cash loan without any problems.
What to do if the borrower wants to get a loan from a certain bank (for example, Sberbank), but he already has a delay in it. How to fix a credit a story? Sberbank obviously will not issue a new loan in the presence of a negative characteristic. It is also sufficient to resort to the services of microfinance organizations and issue microloans for a certain period of time.
What threatens a negative credit history?
It is not difficult to guess that with a bad loan history you will not be able to get another loan. To avoid such unpleasant situations, you should pay off bank payments on time. When concluding a contract, the correctness of filling out a document is important.
Sometimes, due to inexperience and frivolity, some citizens take out small loans and then do not pay them, thereby gaining a poor financial reputation. And when there is an urgent need to purchase, for example, an apartment, they can no longer issue a mortgage loan. And the search begins, how and where to fix the credit history.
How to get a loan with bad credit history?
To obtain a new loan in the presence of a negative loan repayment history, you can contact microfinance organizations. They work with different segments of the population, are ready to get a loan on more loyal terms, but at high interest rates. However, it is best to take loans from such MFIs for an urgent need for financial resources. If the borrower is not sure of his solvency, then you should no longer spoil your already bad credit history.
Some tricks
If a citizen with a bad credit history wants to get a loan at a particular bank, then in order to get a loan he needs to open a deposit account in advance. This is done so that in the future the bank can see the discipline and reliability of its client. Then he can reconsider his attitude to the borrower and apply for a cash loan.
If the borrower had an outstanding loan of only a few rubles (there are such cases), then he can repay it and turn to the bank for a new one. Typically, lenders make concessions, as they are also interested in issuing loans.
Useful Tips
Some ask: “Where can I fix my credit history?”. Of course, the easiest way is in the bank through which wages are accrued. Making credit cards for salaries, you can gradually improve your credit history. It is only important to set a credit limit that does not exceed the salary itself.
In those situations where the payment history was overdue due to illness or other good reason, it is necessary to provide the bank with evidence of this. If at the moment the potential borrower is able to pay the loan, the bank can go forward and reconsider its decision.
And, of course, it’s better to prevent something than to fix it. In situations where there are difficulties with repayments on a loan, you should try to agree with the bank on a deferred payment, revising interest rates or freezing a loan. After solving all the difficulties, the borrower will maintain a positive credit reputation, and the bank will not apply penalties to it.
