Credit history (CI) or credit rating (CDR) is one of the most important parameters that banks and microfinance institutions (MFIs) focus on when deciding whether to lend to a particular entity. It is the negative rating that most often causes the refusal to lend. Banking organizations are not likely to issue a loan with a borrower with a negative credit history, even if all other requirements, availability of collateral and guarantors are fulfilled. Therefore, citizens who are willing to borrow, apply for a mortgage or buy something on loan are most often faced with the need to find out their credit history.
How is credit history formed?
Credit history is formed on the basis of information on borrowed and repaid loans. All data on lending to individuals are submitted to the credit bureau (CBS) and there is automatically calculated the rating of each borrower (both former and present).
Credit history is an indicator of the customer’s reliability and solvency. By signing a loan agreement with a bank or MFI, the borrower automatically agrees to submit their information to the . The credit institution shall forward to the bureau the following information:
- Passport data and contact information of the borrower – name and data of the document (s) provided at the conclusion of the contract.
- Credit product information – loan amount and term, interest rate, and some other information.
- Data from a lending institution – a bank or an MFI.
History can be negative and positive. In the first case, this indicates that the borrower has outstanding loans, arrears, delinquencies and / or penalties. Open loans at another bank can also be a reason for lowering a credit rating, because the solvency of the borrower is also reduced. A positive credit rating is formed if the applicant has previously taken out loans and repaid them without delays and debts. A positive CI increases the chances of approving a loan application.
Why need a credit history?
For banks, MFIs and other lending institutions, credit history is an important indicator, based on which it is possible to minimize its own risks and to weed out unreliable customers. Credit rating information lets you know:
- About fraud. The scheme of registration of a loan for someone else’s passport or other document is quite common. You may not even suspect that a loan has been issued to your data until you contact your bank or MFI for lending. If you have ever lost your passport or copied frequently for submission to various entities, checking your credit history will not be superfluous.
- About debt. Often, a closed loan appears to be outstanding and it turns out that the borrower owes the bank a decent amount – fines and penalties – that have accumulated over several years. This often happens when paying through various services and ATMs that charge a commission. Unpaid few kopecks, unnoticed by bank employees and forgotten by you, can eventually result in a tidy sum.
- About bank mistakes. Sometimes crashes also occur in the system itself, which may cause some payments to be ignored or delayed. In this case, when you go to the bank for re-lending, you will probably encounter difficulties. If you find yourself in such a situation, contact the bank with all the payment documents in your hands to confirm that you are in fact the responsible payer.
- The possibility of lending to banks and MFIs. This is especially important and relevant for anyone planning a mortgage or car loan. Specialized loan products with preferential terms and reduced interest rates are issued only with good credit history. Therefore, you should take care of this in advance.
- About the impossibility of going abroad. The presence of debt on credit obligations is a common reason for a ban on leaving the country. The most unpleasant thing is that you will only be able to find out about credit history problems at the airport a few hours or minutes before departure, when the situation is no longer possible.
In addition, up-to-date information about your credit rating will help you avoid unpleasant calls and meetings with collectors, as well as court proceedings and bailiff actions. After all, in a situation where you are issued a “left” loan or have arrears due to problems in the banking system, everyone can be.
Where to find your credit history?
It is clear that you can find out about your negative credit history by contacting a bank or MFI for a loan and being refused. But where to go to clarify your credit information in advance, before applying? You can request information about your credit history in different organizations:
- In banks and MFIs.
- The notary.
- At the Credit Bureau.
- In communication departments.
As it is possible to learn credit history for free every citizen only once a year, these services are provided for a fee. But the cost is usually small, so it won’t hit your pocket. Also, information on CI can be obtained through the Internet, using specialized services or by contacting directly at the Ukraine website.
To do this, you need to know the subject code, which is an alphanumeric combination. This unique code identifying a specific borrower is generated by the borrower upon signing the loan agreement or automatically generated by the bank’s security system. You can find it in the relevant loan agreement. You can also make a request to the bank where you applied for a loan or to the . Service may then be charged.
The KI code can be contacted at the branch located nearby or on the official website. An online request should be made there, indicating your details. On its basis (free of charge or paid) an extract from the will be formed, which will allow to evaluate, for example, the likelihood of credit approval. It should be noted that obtaining your credit history online is only possible if you know the code of the subject of the CI. It will not be possible to receive it through the site – it is necessary to submit the request in person by contacting the BKI or other authorized organization at the place of residence (registration).
How to increase your credit rating?
Negative credit history is almost a 100% denial of credit, but not a verdict. After all, the credit rating can be corrected in several simple ways. If you incur a loan debt as a result of fraudulent activity, contact your bank or MFI with a claim and proof that you did not take the loan. It is also better to write a statement to the police.
If the debt is the result of a bank error, then you should also contact your nearest branch with prevention and payment documents confirming that you really have no delays. Usually, after considering the claim and the documents, the bank makes changes to the CI, but it takes several months.
If negative credit is entirely your fault, then you should try to remedy the situation by taking a few small loans and paying them off in a timely manner. It is optimal to choose microcredits, as their sum is small, and the term rarely exceeds 1 month. That is, you can solve a problem with a credit rating in a short time.
If current loans are the cause of a negative CI, it is advisable to repay the loan with another bank and apply for a new loan afterwards.
How To Take A Credit With Bad Credit?
Where to find money for repayment and lending in MFIs if the negative history does not allow you to borrow? Online service offers profitable microloans with minimum borrower requirements and passport only. We give money to the unemployed, students, pensioners, housewives, freelancers and the self-employed. At the same time, the data is practically not taken into account, which significantly simplifies the registration procedure and increases your chances of approval.
You can apply for a loan on our official website by filling out a questionnaire and attaching a photo of your passport. After considering the application and deciding (usually no more than 20-30 minutes), the money can be received on the card almost immediately.