How to quickly improve your credit history. How to raise a credit rating with microloans? How to improve your credit score
Having applied for a loan and received a refusal, most people do not even try to find out the reason for the negative decision of the bank. As a rule, bank employees do not give any explanations. The future borrower solves the problem in a standard way - he goes to another institution in the hope of getting what he wants. And not always his desire can come true.
To be sure of the return of their funds, the bank carefully examines customersAnd the reason for the refusal is that the applicant has a low credit rating. What this indicator is, how it is formed, and all the ways to increase it, we will consider below.
This is the main indicator of the quality of the borrower's credit history and determines its creditworthiness. When submitting an application, each applicant is assigned an appropriate scoring score in the form of a three-digit number. According to it, the bank judges the real possibility of the client to repay the loan taken and, on its basis, makes a decision on issuing a loan. It can also affect the interest rate.
There are 5 factors that determine the level of credit rating. Their impact on the borrower's assessment is expressed as a percentage.
- Information on compliance with the payment schedule (35%).This is a key indicator for the lender, as it demonstrates the financial discipline of the client. You cannot hope for a high score if there have been past due payments or even going to court to collect debts in the past.
- The amount of existing debts on loans taken (30%).If the debt burden "eats" half of the income, the risk of non-payment increases dramatically. The client becomes “not interested” in the bank.
- Duration of credit history (15%). A long period of use of borrowed funds indicates reliability, but only under one condition - conscientious repayment without delay.
- Number of simultaneously open loans (10%). Frequent application to the bank for a loan indicates the financial instability of the client.
- Types of loans taken (10%). This indicator is affected by the "seriousness" of the loan. The best option is a mortgage. To obtain it, a very thorough scoring is carried out. Long-term use of credit cards with an increase in the limit also indicates a good solvency of the borrower.
How to increase your score
Based on the above, there are ways to increase the key indicator. Here are some recommendations:
- Try to check your credit history and eliminate all errors and errors in it. Because of them, the client may be refused, and constant failures will immediately affect the quality of the story.
- Make payments on time, demonstrate your conscientiousness in fulfilling your financial obligations.
- If you are a co-borrower, then take an interest in the credit history of your loan partner. His low rating will automatically lower yours.
- In order not to apply often and not get a possible rejection, it is better to check your chances with a loan calculator. Now many banks provide this tool on their websites. The calculation will allow you to realistically assess the conditions of the future loan and the amount of monthly payments.
- Close unused credit cards. Their large number speaks of constant financial difficulties. It is better to leave those that you have been using for a long time.
- Apply for a loan to the bank only in case of serious need.
These characteristics should be monitored from the outset.
Recently, the range of application of such an assessment has expanded. It is used not only to decide on the issuance of borrowed funds: it is required to establish the amount of insurance premiums, for collateral for rent. Some employers have begun to pay attention to it when hiring new employees.
Credit rating is a unit that determines the creditworthiness of an individual or organization. He is also called credit scoring,credit score,score. Credit ratings depend on many parameters, the main of which are past and current financial history, as well as estimates of the amount of financial obligations assumed.
The main purpose of such assessments is to give potential credit institutions an idea of the likelihood of timely payment of financial obligations taken on. Recently, the scope of credit ratings has also expanded: they have also been used to establish new amounts of insurance premiums, to determine rental deposits, and to determine the quality of new candidates for employment.
You cannot take and change your credit history. This is possible only in case of erroneous data entry. In other cases, it is impossible to make changes to the data, but you can supplement your credit history with new information about loans or loans.
In case of compliance with credit obligations, there are no delays in repayment, you will be able to improve your credit rating, reduce the impact of negative factors and improve your credit history.
However, the use of new loans - not is always a sufficient condition. If there are valid delays in the credit history, then servicing new loans is impossible - banks will refuse. And the popular method of using microloans has the opposite effect - banks consider borrowers with microloans at a high interest rate as a risk group.
- identification and elimination of possible causes of failures
- improving credit history through the use of credit products
Ways to increase your credit score
Obvious reasons for refusal - delays
Usually the reasons for the refusal are quite obvious: most likely these are existing overdue debts or already repaid delays, but for which the debt period was long (for example, more than 90 days).
In the first case, you first need to understand the status of the debt. To do this, you need to contact the lender for a certificate of the state of the loan debt. Do not be afraid to do this, when you receive a certificate, you are not "giving up your positions to the bank." But, knowing the current state of affairs, you can understand how best to pay off the debt.
Possible debt statuses:
- the delay is active and interest is charged on it.
- the delay is active, but it does not accrue interest
- debt written off
- debt sold
In the first two cases, you need to contact the creditor with the intention of repaying the debt. The official one is best. Only formal appeals can be given to the court as exculpatory evidence of your intention to settle the debt. If the debt term is more than a year, the chances of restructurization are great, if less, ask for an installment plan or refinancing of the loan, cancellation of the amount of fines and penalties, referring to temporary financial difficulties and a real willingness to settle the debt.
If debt written off- take a certificate about this and whether the status of the debt in it matches the reality. Most likely not - the debt will be in the status of overdue, which is a violation and can be disputed according to yours.
If debt sold to a third party - ask for a copy of the assignment notice. It will indicate the organization - the assignee of the debt. Most likely a collection agency. Contact them with the intention to pay off the debt. Prepare for the conversation in advance: be aware that the collector acquires debt much cheaper than the amount of debt, so do not hesitate to ask for a 40-6% discount on the debt amount and installment payment. As soon as you receive verbal consent, ask to send an offer contract with new conditions and a payment schedule.
Only then can you deposit money. : whether the debt is closed on behalf of the bank and whether there is a record of the same debt on behalf of the collector. In case of inconsistency with reality, write an application for amending your credit history to the BKI or to the bank.
Non-obvious reasons for rejection
The reasons for the refusal are not always known to us - we are sure that we have paid everything off and do not have any for a long time. But in reality it looks different: according to statistics, a quarter of credit histories are damaged due to the fault of the lender. The reasons can be different: from a technical error, to problems associated with mergers, closures and acquisitions of financial institutions.
Also, do not forget that telecom operators and housing and communal services can submit data on delinquencies in the credit history.
Therefore, after receiving a credit history report (it is better to get reports from the four main CBIs) - check them carefully for compliance with reality.
Of course, doing this "manually" is tedious and rather difficult if you are not a professional banker. Therefore, we recommend our a system for checking and analyzing credit reports.
Just upload the received reports of any bureau (NBKI, OKB, Equifax, CBRS) in the format pdf into the system below and in a minute you will see:
- Your credit score
- Summary and comparison of all downloaded reports in one place
- Ways to optimize payments on current loans
- List of possible errors in credit history
- Reasons for refusal of loans
- Recommendations for improving your credit score and history
- Current offers of banks available in your situation
Formation of a positive credit history
Now that all possible causes of failure have been eliminated, you can proceed to the next important step - improvement of credit history.
The easiest way is to take a few small loans and pay them off without delay. Ideal for such an operation are loans for household appliances offered in almost any supermarket or credit cards.
But firstly, if you already have a bad credit history, you will simply be denied a loan.
Thirdly, applying to several organizations at once - you increase the risk of rejection and lower your credit score. Each application for a loan is recorded in the credit history and spoils it in case of refusal.
So, task number 1 is to find a bank that will approve a small loan or credit card. Searching for a bank by searching is not suitable for us - this is time and it spoils the credit history.
To solve this problem - we have created a search system for banks with the highest probability of approval. The system analyzes your credit history, income data, employer and government funds - essentially the same as a bank when applying for a loan. Then, the system finds similar portraits of borrowers in our database and looks at which banks have already approved such clients and displays a list of them for you.
To use the system, also fill in the data about yourself in the questionnaire. Then the system will do everything itself.
What to do in case of refusal
Of course, there are situations in which banks refuse despite all efforts, and a vicious circle turns out: we need to improve our credit history, but we can’t, because no one gives a loan.
For this case, we have developed a product for restoring or creating a credit history.
These are programs to improve credit history for people who, for one reason or another, cannot get loans. The essence of the program is obtaining a credit limit and using it for 3-6 months.
Information about the funds received and repaid, we accurately and accurately transfer to the main Credit Bureaus.
Thus, you form a positive credit history. Gradually, the positive entries will begin to have more weight than the negative ones and you will be able to apply for the desired loan.
You can participate in the program with any credit score, any credit history, zero credit history, and even bankruptcy in your credit history. Approval of credit funds - does not depend on the credit score and credit history.
Any intruder, having taken possession of copies of your documents, can issue a loan in your name, and you will not even know about it until collectors or the bank call.
This was due to delays. But at the same time, many of them managed to improve their credit history and now they have the right to apply for loans in any bank in our country.
But how to do that? Let's consider this question in more detail.
Ways to fix bad credit
Often borrowers with a negative credit rating ask the same question - is it possible to fix their credit line? We answer: no, it is completely impossible, but it is quite possible to increase the credit score, which will make it possible to obtain a loan in any bank of the Russian Federation.
To do this, you just need:
- repay all open loans in a short time;
- if possible, open a deposit in any banking institution so that all banks see a constant additional income and solvency;
- issue small loans in MFIs or in banks and repay them ahead of schedule;
- make monthly payments on existing loans within a clearly defined timeframe, there can be no talk of any delays.
It must be remembered that any loan, if repaid early or within a clearly defined timeframe, can significantly improve the credit line of each borrower.
In addition, you can seek help from certain credit bureaus, which, for a small fee, will analyze the credit rating and offer their own ways to increase the credit line. We will talk about these services later.
How to improve credit history with microloans
Any loan can either improve or worsen the credit line of each borrower.
Microloans are the best option to address the issue of improving your credit rating.
The algorithm for improving credit history in this way is as follows:
- Search for a banking institution with the best lending conditions (here you need to pay attention to the fact that you need to go to the bank that gives loans if you have a negative credit rating).
- Get a loan for up to 10,000 - 20,000 rubles.
- Get approval from the bank.
- Get credit funds.
After the borrower receives a loan, it is enough to repay it ahead of schedule. If desired, this procedure can be repeated only this time in another bank.
As practice shows, this method allows you to significantly improve your credit rating in a short time.
How to improve online for free
In fact, there are no free services that can improve a borrower's credit history. If anyone offers this, it's safe to say that they are scammers.
This is due to the fact that in order to improve the credit rating, in any case, you need a loan for any amount and its early repayment, or payment within a clear time frame without. Another correction option is to correct the credit history if it has deteriorated for any reason beyond the control of the borrower.
But at the same time, there are services that, for a nominal fee (no more than 800 rubles), will analyze the credit rating and offer their own ways to improve it as soon as possible.
It's about the credit bureaus themselves.
The most popular are:
- Equifax;
- mycreditinfo.
Equifax
In addition to providing information about borrowers to banks, this credit bureau also provides other services, such as:
- analysis of the borrower's credit rating at his request;
- development of history improvement schemes.
For a fee which does not exceed 800 rubles, the credit bureau will evaluate the credit rating, in case of any errors in it, it will correct it, and also offer the client himself possible ways to quickly increase the credit rating.
Any borrower can do this online.
mycreditinfo
This credit bureau works in a similar way as the previously discussed algorithm, namely:
- The borrower pays for the service of checking the credit history and analyzing its improvement;
- BKI analyzes the borrower's credit line;
- The borrower receives a detailed report, which also indicates how to solve the problem.
The report is sent by the credit bureau to the e-mail of its client, as a rule, within 2 days from the date of submission of the corresponding application.
Does Platiza improve credit history?
This microfinance organization provides loans to all borrowers who need financial assistance. Like any other MFI, including banks, it passes all information to the Credit Bureau.
This is the basis for stating one thing - with the help of Platisa, you can improve your credit rating.
How can I improve the credit line with Platiza?
First of all, you need to understand that any borrower with even the worst rating (in which even MFIs do not give loans) can improve their credit rating.
The CI improvement algorithm is as follows:
- the borrower registers on the Platiza website;
- informs the MFI consultant about intentions to improve the credit history;
- he is given a loan, and he repays it after a certain period.
At the same time, initially a loan is issued in the amount of up to 1000 rubles (depending on the credit line), which must be repaid exactly in a week. After that, Platiza draws up a loan for him for a large amount, and tells him when to repay it.
With such a scheme, after a few months, each borrower with any credit rating can receive a loan for the amount he needs in any banking institution, including even Sberbank.
When using this method, new loans (even for a small amount) fully cover the negative credit rating, and bring it to a new level, in which there are no restrictions on choosing a bank where you can get a loan on favorable terms (betting this, as a conscientious payer ).
How to improve credit history in Sberbank
Many borrowers are interested in one question - how can you improve the credit line at Sberbank so that you can again get a loan from them for the required amount?
First of all, you need to do this in several ways, namely:
- when buying household appliances, draw up an installment plan and repay it, if not ahead of schedule, then at the time clearly specified in the contract;
- apply for a microloan in any bank and repay it ahead of schedule;
- apply for a loan in the MFI and also repay ahead of schedule.
In the event that a negative credit rating has been formed due to circumstances beyond the control of the borrower (for example: illness, malfunctions in the banking system, and so on), then you should send an application to the Bank for Credit Line revision indicating all the reasons due to which the negative rating appeared. rating.
In turn, BKI within a month will check the information received, and perhaps the credit line will be corrected.
Improve your credit history with an online loan
Any borrower with any credit rating can apply to an MFI and get a loan, but only if he has no criminal record.
The algorithm for increasing the credit line in this way is as follows:
- Search for MFIs with the best lending conditions.
- Filling in the personal data.
- Making an application for a minimum loan with a loan period of up to 20 calendar days.
- Choose the method of receiving funds - bank card.
- Waiting for application approval.
- Receiving funds.
After the loan is approved and the borrower receives credit funds on his bank card, you must wait about 5-7 days and make early repayment of the loan. In this way, you can slightly improve your credit score.
You can repeat this procedure an unlimited number of times.
If we talk about the MFIs themselves, then there are a lot of them on the Internet. Among the main ones are:
- Seimer;
- moneyman.
Challenge the information contained in the credit history
In the event that the borrower does not agree with his negative credit rating, he has every reason to file a request with the BKI and appeal this.
It happens like this:
- a request is formed to appeal the credit rating in the prescribed form (the form can be taken from a notary);
- certified by a notary;
- is sent via e-mail to the address of the BCI, which the bank cooperates with (this can be found directly at the bank).
In turn, after receiving this complaint, the BKI sends its request to the bank, which could in any way give false information about the borrower. The bank checks all the information on the loan at home and sends the verification report back to the CBI.
The credit bureau, after receiving the bank's response, conducts its analysis and only after that decides to correct the credit rating or leave everything as it is.
The entire check can take up to 1 calendar month, no more.
If the borrower after that was dissatisfied with the result, he has the right to apply to the district court at his place of residence.
How to fix a bad credit history through Sovcombank
SovcomBank provides its clients with the opportunity to take part in the unique Credit Doctor program. With this program, you can easily improve your credit line.
The program takes place in 2 stages:
- at the first stage, the borrower receives a loan in the amount of 5 thousand rubles and repays it on time;
- at the second stage, the borrower again receives a loan, but this time for 10,000 rubles.
At the same time, there is only one condition - it is necessary to clearly comply with all bank settings for the payment of loans, which are calculated on an individual basis.
As practice shows, the participants of this program were really able to improve their credit rating.
Company Experian compiles a credit score that evaluates - in the range of 300 to 850 - your creditworthiness and how it relates to your credit report. The rating is formed on the basis of FICO data and other credit history assessment systems. For example, a score of 300 to 579 is considered "very poor", 580 to 669 is "fairly good", 670 to 739 is "good", 740-799 is "very good", and 800 or higher is "exceptional".
With a rating in the "exceptional" range, you can get the most favorable loan offers. In addition, you can get 0% credit cards, save thousands of dollars on your mortgage, and increase your credit limit on your accounts. Here are a few steps to help you improve your credit score.
1. Find out general information
In order to get a credit score in the range of 800 and above, you first need to find out where on the FICO scale you are now. Once a year, you can request a free annual credit report from the top three credit reporting companies in the country. If you find any problems in the report from Experian, Equifax or TransUnion you should take action to address them.
2. Build a long credit history
Lenders generally rate borrowers with short credit histories as riskier. To get 800 points in your credit score, you need to build a long credit history. Therefore, keep your old accounts, even if they have a zero balance and you no longer use them.
3. Pay your bills on time
When it comes to improving your credit score, your payment history becomes a very important factor. Paying your bills later than the due date reduces your overall credit score. Use the service of automatic payments, then the necessary payments on your accounts will be made on time.
4. Rethink your use of credit cards
Thirty percent of your credit score is made up of your credit utilization ratio, which is your debt divided by your loan body. Typically, you want a credit utilization rate of 30% or less, so if you have a credit card with a $1,000 limit and you have to pay $300, you are on the verge of a limit. If your debt increases, then this can negatively affect your credit score.
5. Diversify your accounts
Account diversification can also help improve your credit score. This does not mean that you have to open 10 different accounts. This means that you should divide your loan into different needs, for example, a mortgage loan, student loan, auto or card loans.
6. Cut costs
One of the steps that can bring you closer to the coveted 800 credit score is proper budget allocation and spending cuts. While your income doesn't directly affect your credit score, try to live off the money you earn. Try to cut down on unnecessary expenses, such as expensive meals or subscriptions to cable channels that you rarely watch.
7. Do not act as a guarantor for other people's loans
If you take responsibility for someone else's credit, then you run the risk that the person you vouched for will not be able to service their credit, and this could affect your credit score. If your goal is an "exceptional" credit score, then try to avoid that responsibility. Also, report lost or stolen credit cards to the bank in a timely manner. If you don't do it on time, you risk being held liable for unauthorized purchases, which will also lower your ranking.
8. Limit Hard Loan Account Requests
When you - or someone else - submits a request for credit information, it does not affect your credit score. A soft request includes information such as checking your credit score, allowing a potential employer to check your credit history, and companies checking your credit limit. A hard request is information that the company asks for about your mortgage or card loan. Try to limit the number of such requests, as this directly affects your credit score.
Some borrowers, probably, do not even have any idea about the existence of this very rating. You should start with how the loan is actually calculated. It turns out that the final amount of the loan is influenced by specific factors.
For example, the history of payments on previous loans is of great importance, what were the debts to the bank, how long is the credit history. An analysis of these parameters will allow the bank to decide on how much and for how long a potential client can expect.
The payment history contains complete information about the repayment of each regular payment. Even if a sufficient amount was deposited, but with a delay of one day, this information will be reflected in the history.
- A special column contains data on the presence of debt on loans that are not paid on time. That is, if the client has several loans, then for each of them the relevant information will be in the payment history.
- Whenever you open a new account, it starts counting your credit history. Obviously, in order to obtain the most attractive credit conditions, it is desirable for the client to already have a positive history in this bank. The likelihood that a loan for a large amount will be approved becomes much higher.
- Experts advise not to close all accounts in the bank if cooperation with it has been terminated at this point in time. It is recommended to periodically draw up credit cards and keep at least one account open so that the credit history does not end.
- The presence of one fairly large loan for which payments are made on time (for example, a car loan) will also help to improve the rating for a current loan. Do not neglect the execution of leasing agreements, as this is another plus for the credit rating.
However, it is worth noting that not all factors have the same impact on a client's rating.
- The most significant of them are the presence of debt and the history of payments (not only in the bank where the borrower applied for a loan).
- You can put in second place, namely its term (for this reason, it is not advised to close all bank accounts).
- All other parameters of the credit rating are of secondary nature and can only be considered if the client has passed the test for all the previous factors.
In order to get a loan for a sufficiently large amount, almost any bank will require the client to provide collateral. The most common option is a pledge of an apartment or other real estate. However, compared to real estate, which is not highly liquid, the provision of gold, platinum or palladium bars as collateral for the bank will be more attractive due to…
Among the many factors that a bank takes into account before making a decision on issuing a loan, there is one factor that plays a crucial role. His name is the credit history of the borrower. A positive credit history is a strong argument in favor of approval of an application for almost any type of loan. But will they give a loan if there is no credit history? You will find out by reading...