How to fix your credit history

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Lifehacker's experts will help you regain your reputation as a solvent borrower.

Age, salary and marital status affect the terms of lending, and credit history - in deciding whether to give money or not.

A good credit history is important not only in relationships with banks. This data is used by law enforcement agencies, insurance companies, employers. Bad credit is a sign of financial immaturity. Such a person will not be trusted to work with money, and insurers are unlikely to offer a lower rate.

How credit history is formed

Previously, each bank kept its own registers of loans and borrowers. Now all data are accumulated by the credit bureaus (BCH) based on bank reports. Today there are 13 such bureaus in Russia. They help banks mitigate risks and process loan applications quickly.

Credit history is affected not only by debts to banks, but also unpaid fines, alimony, taxes, utility bills. Provided that their recovery reached the court. Information about such debts is transferred to the BCH by the Federal Bailiff Service, providers, utilities. Also, the credit history contains information about the bankruptcy of individuals.

The data in the BCI are stored for 10 years. So the credit history can be reset by waiting this time.

If there is no opportunity to wait or there is no credit history (this is bad, because banks cooperate primarily with borrowers who have already proven themselves), the financial reputation can be improved.

How to fix your credit history in case of a bank error

You can find yourself in debtors due to a technical failure or the notorious human factor.

For example, you paid as expected on the first day, but the terminal broke down or the cashier pressed the wrong button. As a result, only the third person received money on the credit account. Two days overdue.

The first step is to clarify your credit history. Perhaps the bank did not report the delay to the BCH.

How to check your credit history →

If you managed to be credited as a debtor, contact the creditor first. The bank, through whose fault the error occurred, must update the data transferred to the BCH.

If the credit institution does not respond to your request, submit an application for correcting the error directly to the bureau where the incorrect data is stored. The right to do this is enshrined in the Law on Credit Histories, and you can use it during the entire storage period of your credit history, that is, all 10 years. The application can be sent by mail or submitted in person at the office of the bureau.

The Bureau will contact the creditor and send him the claim. It is important that there is a bank oversight or technical problem. If the debt was formed due to the carelessness of the borrower, you will have to resort to other methods of correcting your credit history.

The decision on the application for making changes to the credit history is made within a month.

How to fix your credit history in the event of a technical delay

Many borrowers suffer from a lack of financial discipline. They do not follow the payment schedule, postpone everything until the last day, forget to leave money for a loan, and so on. As a result - penalties and minus to credit karma. In this case, the decisive role is played by the significance of the delay.

A delay of 1-2 days is usually not reflected in reports and is called a technical delay. After all, a person could get sick, go on vacation, or simply forget.

In the event of a technical delay, in no case should you ignore calls from the bank. The way you communicate with him after a delay affects his loyalty. If the reasons for the delay are objective, the bank may postpone the report to the BCH. And vice versa. If the client avoids communication or is aggressive, the information will be sent to the credit bureau immediately.

David Melkonyan General Director of the Moscow Legal Center "Vector"

As a rule, after 5-7 days of delay, the bank tries to contact the client. First, the debt department of the credit institution itself works. At the same time, it is important whether the client makes contact, whether he answers calls, how he talks with the operator, and what explains the delay. Ignoring such calls is a bad tactic. If the client shrinks from the conversation, this is a reason for the lending institution to turn to collectors. But when transferring a debt, it is usually not the period of non-payment that is taken into account, but the amount. If the debt exceeds 50-70 thousand rubles, collectors take over.

Who are collectors and how to avoid meeting them →

Try to pay off the delay as soon as possible and continue to strictly adhere to the credit schedule. Do not seek to repay the loan ahead of schedule: banks are more loyal to customers who are with them throughout the entire loan period.

But the main thing is to avoid even technical delays! Deposit money 2-3 days before the recommended payment date.

How to fix your credit history if the delay is significant

Some banks consider a delay of more than a month to be a gross violation of the contract, while others have a negative attitude only to delays of 90 days or more.

Small banks are more willing to cooperate with undisciplined borrowers. They always need clients and are ready to lend to citizens on individual terms.

What you need to know to get a loan from any bank →

In case of long or repeated delinquencies, try to restore your credit history with a new, easy loan.

The worse your credit history is, the more small loans you will need to pay off to fix it. But remember the golden rule.

Take as much as you can give. Including interest overpayment.

It is not worth submitting several applications at once. For credit institutions, this is a signal that money is desperately needed, and another reason to refuse.

Better check your credit score with scoring. Credit scoring is a system for evaluating a borrower based on statistics. If you get rejected faster than you can fill out the questionnaire, it's probably scoring.

Most banks use an algorithm developed by FICO, when points are awarded for each answer (gender, age, education, other loans, etc.). If there are less than 600 of them, the refusal comes automatically.

There are online services for calculating personal credit scores. As a rule, this service is paid.

Anastasia Loktionova Deputy General Director of the Rusmikrofinance Group of Companies

If the delay has arisen a very long time ago, the loan amount can greatly increase due to penalties and fines. With this structure of debt, it is prudent to consult a lawyer specializing in credit matters. He will analyze the situation and help to partially or completely nullify the penalty set by the bank.

Another financial tool for improving your credit history is a credit card. Banks are willing to issue credit cards and are more lenient in assessing the solvency of their future holders.

You need to make small purchases and return what you spent in an interest-free period. But it is necessary to read the contract very carefully and calculate the risks. Neglecting credit card debt can lead to a real debt trap.

How to use a credit card and not get into debt →

The interest-free period usually does not apply to cash withdrawals and transfers, and if the grace period is missed, interest is charged on the entire amount spent for the entire time from the date of purchase. The interest rate on cards, as a rule, is 2-3 times higher than on ordinary loans.

How to fix your credit history if the delay is very large

Many people give a damn about their credit history.

Imagine the situation: a guy received a summons to the army, took a micro-loan, had a good time with his friends in the end, and left to serve. It came down to the collectors or the court. Parents found out about the incident, their son was scolded, the loan was repaid, but the guy remained on the black list of credit organizations. After a few years, he settled down, got married and wanted to get a mortgage. But due to the youthful antics in all the major banks, he will most likely be rejected.

Financial literacy is not taught in school.

If you have badly tarnished your honor as a borrower, you can try to become an exemplary client of the bank, take out a loan secured by property, or contact a loan broker.

If you are interested in lending in a particular bank, and he is not yet cooperating, become his debit client. Transfer your salary to the card of this bank, or better - open a deposit.

Deposit or investment account: where is it more profitable to invest money →

Many banks, in addition to scoring applications, also perform "behavior scoring". This is an assessment of the client's probable financial actions, which makes it possible to predict the change in his solvency. The bank will monitor the movement of funds in your accounts and, possibly, in a few months it will offer you a line of credit itself.

You can also try to take a secured loan. This is a loan in which you back up your promise to return the money with property. For example, land, housing or a car. The main thing is that the collateral is liquid: a renovated apartment, a car not older than five years, and so on. The size of such a loan is usually about 80% of the value of the collateral.

It is very popular now to contact credit brokers. A broker is a specialist who selects a credit organization for a client based on his credit history. For a fee, of course.

Credit brokers usually work with problem clients who cannot get through the millstones of the bank's security service in any way. They not only direct them to the right place (it can be either a bank or a microfinance organization), but also give advice on the formation of a package of documents, terms and amounts of lending. In some cases, brokerage houses themselves act as lenders.

Andrey Petkov General Director of the "Honest Word" service

The services of a loan broker are more suitable for legal entities, since mistakes in business can be very expensive. Individuals with a sufficient level of financial literacy can easily get by on their own. You just need to spend time and understand the intricacies of various loan products.

It's not as difficult as it sounds. There is a lot of information and specialized services on the Internet. For example, banki.ru has a “Loan Selection Wizard”.

If you decide to hire a loan broker, choose very carefully. There are many scammers in this area.

Do not trust companies that give 100% guarantees and say that they directly influence the decisions of banks, or, on the contrary, intimidate that none of them will work with you. Run like fire from those who are asking for a portion of your approved loan.

How to fix credit history in case of insolvency

According to the Central Bank, Russians took over 12 trillion rubles from banks in 2017. At the same time, an increase in loans with overdue payments was recorded. When a person loses his job, gets sick, or gets into trouble, the credit burden becomes unbearable.

Soberly assess your strength: do not take more loans than you are able to service. Experts consider it permissible to spend up to 20% of income on loan servicing.

If you take more than half of your earnings to the bank, the situation is close to a stalemate. In this case, it is prudent to ask the bank for restructuring.

Restructuring is a procedure for restoring the client's solvency. It can be expressed in an increase in the term of the loan, a change in the interest rate, a change in currency, or a delay in payments. Contacting the bank with a request for restructuring is the first thing to do if financial difficulties arise.

How to reduce or write off loan debts: 5 working ways →

Even if the bank refuses, you will have documentary evidence that you tried to solve the problem, that is, you are a victim of circumstances, and not a malicious defaulter. This can play into your hands if the creditor goes to court.

Anastasia Loktionova Deputy General Director of the Rusmikrofinance Group of Companies

When collecting a debt in court, you can ask the court for a deferral or installment plan. Having received the opportunity to repay the debt in parts according to a convenient schedule or by gaining time, it will be easier to cope with credit obligations.

How to fix your credit history in case of fraud

You live, you don't bother anyone, and suddenly you receive a letter: "To avoid penalties, pay off the debt under loan agreement No. …" What kind of loan? Where do the debts come from?

No one is immune from fraud in the banking sector. For example, attackers can apply for a loan using a copy of a passport. Rarely, almost always in collusion with the employees of a credit institution, but this happens.

Can I get a loan using a copy of my passport →

Request a credit history. Preferably in several offices at once. Having identified in which credit institutions the cybercriminals took loans, contact this organization. You will be prompted to write a claim or an explanatory note and check. As soon as the security service is convinced that you are not involved in fraud, the bank will update the information in the BCI.

If the bank does not want to understand and makes you pay for other people's debts, contact the law enforcement agencies.

Output

Credit history is an important indicator of a person's financial standing. Therefore, remember three important rules.

1. Check your credit history regularly.
2. If you find errors in your credit history, including due to fraud, contact a credit institution or BKI with a request to correct the data.
3. Always maintain strict financial discipline. If you messed up your credit history, try to fix it with a small, affordable loan. In extreme cases, you can contact a broker or take out a loan secured by property.