Often there are cases when the only way out of the current difficult financial situation is to get a loan. However, if a person has a bad credit history (CI), then no bank will give him a new loan. Do not worry, because there is a way out of this difficult situation. How to improve credit history will be described in this article.
What it is?
Credit history is understood as information about the borrower, characterizing the fulfillment of its obligations under the loan agreement, that is, a full refund of received funds. In the event that the borrower fulfilled all debt obligations on time, then the payment history is considered positive. If the borrower violated the terms of the contract and did not repay the debt to the creditor, then his credit history is negative. It consists of three parts:
- title
- main,
- additional.
The title part contains information about the personal data of the person who made the money loan, namely, full name, passport details, place of birth, TIN, data of the certificate of mandatory pension insurance.
The main part of the document contains data on the registration and registration of a citizen, the total amount of debt and the due date, all information relating to certificates from government agencies, as well as from credit institutions characterizing the solvency of the borrower.
An additional part of the history of financial payments by the borrower contains information about those organizations that issued cash loans, as well as the dates of their requests.
Why do you need a loan history?
First of all, credit history is necessary for organizations issuing cash loans. This system was created after the emergence of many unscrupulous payers who did not fulfill their obligations under the loan agreement. To track such non-payers, as well as identify them, a database of credit histories was invented. Thus, all banks send daily reports on their customers, namely on the design or repayment of the next loan. A single database of credit histories stores all information about borrowers, that is, about the amount that they received as a cash loan.
That is why, if some bank refused to grant you a loan, you can make a request and find out the reason for the refusal by reading your history of financial payments. Perhaps it simply made mistakes, after the correction of which it will be possible to count on getting a loan. How to improve a damaged credit history will be discussed below.
Where to find out your financial profile?
All reports on borrowers are stored in the Central Catalog of Credit Histories, which was created by the Bank of Russia. This single database receives all reports from credit organizations. In addition to the Central Catalog, there are also bureaus - BKI. They are commercial organizations and perform the same function as the CCCH, only there are many. In which particular unit the history of a particular borrower is stored, you can find out by contacting the bank.
You can find out about your credit reputation both at the BKI branch and online. To do this, you need to know the subject code. If there is no such code, then you must personally contact the bank office, credit history bureau or microcredit organization.
Where to get a loan with bad credit history?
Due to the fact that banks do not issue cash loans to persons with a negative financial reputation, one can find a way out in a difficult situation with the help of MFIs. Microfinance organizations issue loans to borrowers even with a poor history of financial payments. This is one of their main advantages. Such loans, improving credit history, can help out in a difficult situation and quickly solve the problem of cash shortages. All that is required is an identity card. The manager of a microfinance organization will issue a loan in a short period of time. However, it is better to take such loans for a short period of time, because you will have to pay large interest.
How can I improve my credit history?
Citizens are asking a similar question if they wish to arrange a large loan for a long period of time in the future. For example, to buy an apartment or car. Naturally, everyone has a chance to improve their financial reputation. To do this, you need to know some subtleties. So how to improve your credit history? It is necessary to arrange loans for the purchase of household appliances or furniture within two to three years. Making payments on time, the borrower will thus correct his CI. After some time (as mentioned above, this is 2-3 years), the bank, having made a request about its client, will find out that it is a reliable payer with a positive financial reputation.
Many are interested in how to improve the credit history at Sberbank. If we talk about a specific bank, then the algorithm of actions will be similar. You can try to contact the bank manager and ask for a review of the previous debt. Perhaps the lender will meet and do loan refinancing, that to improve the financial capabilities of the payer, and over time, his reputation as a borrower.
Advantages of Microloans
Speaking about microfinance organizations, we can emphasize the fact that they never make a request to the credit bureau. This is one of the most significant advantages. However, such an advantage is insured by high interest that the client must pay on time if he decided to improve his credit history with microloans.
Also, with the help of MFIs, you can save time on the consideration of the application. Banking organizations often spend from a few days to several weeks on this procedure. Agree, when money is urgently needed, waiting so long is an impermissible luxury. That is why, wanting to quickly solve their financial problems, you can use the services of microfinance companies.
Consequences for non-payment of loans
Each of us knows that it is better not to joke with banking companies. Of course, we are aware of the fact that the refusal to pay a loan threatens with consequences. Nevertheless, far from all are aware of the real consequences that may occur in case of non-payment of debts.
First of all, the bank can charge penal interest for the fact that the borrower did not repay his obligations on time. Further, after three months, even more serious consequences may follow, namely sale of collateral. The fact is that if a loan was issued on bail, the lender can file an application with the court asking for the sale of the pledge in order to return the entrusted funds.
In the event that a loan was issued without collateral, the bank may take even more stringent measures, for example, obtain permission through the court to sell any property of the debtor. As a rule, the most valuable property is an apartment or a car. Thus, having repaid the debts of the borrower, the bank returns to him the rest of the proceeds from the sale.
All of the above actions by the banking organization will be displayed in the report, which is sent to the BCI. In order not to then wonder how to improve credit history, a citizen should initially know all the consequences of his insolvency.
CI Myths
You can often hear myths about borrower payment histories, sometimes without any reason to be true. For example, some believe that a lack of credit history is good. However, this is not always a positive fact for the borrower. Banking organizations, on the contrary, treat such customers with caution. This is explained by the fact that if a person does not take money loans, then he simply is not able to pay them. In fact, large loans are rarely given to such clients, or only on the security of valuable property.
In another case, the misconception is the fact that banks know all the information about customers. That is, it is believed that lenders have their own black list of borrowers, which displays all the financial movements of a person. Although a single database exists, but not all banks send reports about their customers. Thus, a small loophole appears for lenders with the help of which it is possible to arrange a loan even with poor CI. This rarely happens, but is not completely excluded.
Another myth is that you can independently fix a bad credit payment history. However, not a single BCI will agree to change data about the borrower, because it values its reputation very much. Thus, there is only a loan to improve credit history, which can be repaid on time and without fines. Such a loan, as mentioned above, is a loan in a microfinance organization for the purchase of household appliances or furniture.
Useful Tips
In order to find out how to improve your credit history, if it is damaged, you should first contact your service manager in the bank where you plan to take a loan. Currently, credit organizations often meet their customers, and if the financial reputation is not too affected by past loans, then there is a chance to make it positive.
In a situation where a person is sure that he repaid all loans on time, perhaps a mistake was made by the bank. Unfortunately, this also occurs. Then the best option would be to contact the manager with a request to check the submitted reports. If a typo was really made there, the creditor is obliged to correct it and send a new report.
Thus, if you ask yourself how to improve your credit history, you can safely follow the tips described above and be sure that you will soon be able to get a new money loan.
