10 non-obvious things that can affect your credit history

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

Your chances of getting a new loan depend not only on how well you repay old ones.

The credit history reflects whether you borrowed money and how disciplined you were to repay it. Banks use it to test your bona fides when approving loans.

Sometimes the decision of a credit institution can be influenced by various little things that seem insignificant. Their presence does not mean that you will never be given a loan again - not at all. But it will be better to avoid the accumulation of these errors in one credit history.

1. Lack of loans in the past

It would seem that if you do not take loans, then everything is in order with your money. Therefore, a blank credit history should only increase your chances of getting a loan. But look at the situation from the bank's perspective.

Based on your credit history, he can assume with what degree of probability you will repay the debt and whether you will do it on time. Using an empty document for this is like multiplying by zero, because no conclusions can be drawn from the missing information. So it is not clear to the bank what kind of borrower you will be.

However, it is not necessary to run and take out a loan to add it to your credit history. Just keep in mind that you will have to be more convincing when applying, such as proof of income.

2. Applying for a loan to several banks

Let's say you decide to cheat: send applications simultaneously to different banks and see on what conditions each of them will approve the loan in order to choose a more profitable offer. These requests will end up in your credit history and can make it suspicious.

From the bank's perspective, your strategy doesn't look like a dodgy move. It seems to be the behavior of a person who is in great need of funds and therefore bypasses banks in panic in order to get money faster. So you become an unreliable "client".

3. Your refusal from the loan

Continuing with the previous example, let's say that several banks have approved a loan to you. You accepted one offer and refused others. These refusals also end up in the credit history. And it seems like there is nothing here that can go wrong, because you just did not take the money.

But the bank spends some resource when approving a loan: it checks your solvency, calculates a credit rating, determines how much money can be given to you. And there is no point in spending a resource on a person who refuses loans - it is easier to immediately reject his application and deal with other clients.

4. Credit card with a significant limit

Perhaps you succumbed to persuasion and issued a credit card just in case. Or you are actively using this card to receive bonuses. You have no debt on it, so it is not a concern.

However, for the bank, you potentially have a loan, and a considerable one. After all, you can withdraw a large amount from the card at any time and add this debt to their loan. This, in turn, can lead to the fact that you will not be able to pay off all your debts.

5. Guarantee for other people's loans

In this case, the situation is approximately the same as with a credit card. Now you have no debts, but surety is a ticking time bomb. It may not explode, but if it does, it will hit you.

When the principal borrower fails to meet debt repayments, the burden falls on the guarantor. Which makes him not a very desirable applicant for a loan from a bank.

6. Communal debts and not only

Not any debts are included in the credit history, but only those for which the case went to court. If a decision on enforced collection is made against you and you have not paid off your debts in 10 days, the organization to which you underpaid transfers the data to the credit bureau. Banks see this and do not want to get involved with a person who has not coped with their obligations.

7. Loan in a microfinance organization

The situation here is twofold. On the one hand, if you took out a loan from a microfinance organization and repaid it on time, this confirms your good faith. On the other hand, questions may arise as to why you went to an MFI. Didn't have enough money before paycheck? Did you understand that the bank would refuse you? So this fact of your biography may be considered suspicious.

The decision will depend on the policy of the bank. True, a person from the street is unlikely to find out about it, since credit institutions keep their payment systems secret so that scammers do not get to them.

8. Frequent change of personal data

Personal information changes in your credit history every time you submit an application to the bank with new data. And institutions see how often you do it. Of course, no one would consider a phone number change suspicious. But if this happened six times over the past year, then this is alarming.

9. Errors and carelessness

Now many processes are automated, but often a person puts his hand to them, and it is common for him to make mistakes. For example, you can deposit money into the account from which the loan payments are withdrawn, but do not take into account the penny. And a shortage of one kopeck will be the basis for the bank to fix the delay.

Therefore, it is worth checking after each payment whether everything is in order, whether the money went there and in what volume. And when repaying the loan, be sure to take a certificate from the bank, which confirms this fact and the institution's absence of claims against you.

10. Loans taken by fraudsters

You may not know that you have become a malicious defaulter. This happens if fraudsters took a loan in your name. These actions can be challenged by contacting the bank and the police. However, to do this, you need to learn about fraudulent loans.

And therefore, you should yourself periodically check your credit history to find out if it is damaged. This can be done twice a year for free.