Many of us wonder how to build a positive credit history? How to make the bank grant us a loan in the future, which we need, e.g. purchase of an apartment and does not increase the margin drastically? In the article below, we’ll talk about building a positive credit history. Let’s start from the beginning.
There are three types of credit history: good, bad and missing. A good story means regular debt repayment – thanks to it the bank can offer a loan on favorable terms. The bad story is when there is debt or a lack of continuity in loan repayments. Not so terrible as the devil says, because a bad credit history can always be turned into a good one. Paradoxically, the worst situation is the last one: no credit history. The bank does not know what to expect from such a client? Will he pay back regularly or not? It’s like flipping a coin – you don’t know what will happen. In such a situation, the bank cannot show full confidence and will increase the loan margin. Sometimes it is only a 0.3% difference, but with a larger amount it can turn into a sum of up to $ 30,000.
Something in installments
Taking something in installments – e.g. some equipment (it can be a new computer, washing machine or fridge) is the first step to build a good credit history. Regularly, monthly paying off part of the liability, BIK registers that you are starting to create a good credit history.
A small loan for any purpose
The second simple and proven way is to take a small bank loan for any purpose. If you have already bought the laptop mentioned above and your washing machine broke, take out a loan for it. Thanks to this, you will show that you have already taken your first loan.
How to build a positive credit history? Don’t indulge in debt!
Well, since you have already taken a laptop and a washing machine, and you have to pay the liabilities in monthly installments, be careful not to fall into debt. You must have your expenses under control. Regularly check the status of your obligations, watch over installment repayment dates. Remember that you always have the opportunity to check your scoring in BIK.
Do not take more on yourself than you can bear.
If possible, have more than one commitment
If you have such an option, think about having a debit on your account and a bank loan at the same time, or a credit card and installment purchase. Thanks to this, you will prove to the bank that you are able to deal with your debts.
Start a debit on your current account in your bank
The debit is included in the Credit Information Bureau as a credit obligation. If you never debit your account, you will not incur any costs for it, but you will increase your credibility in the eyes of the bank.
Note the consents you give to BIK
It is very important that you agree to BIK to process information about your loans (even after their termination), thanks to which, even if you have already finished paying off your credit card or loan, the bank will see that you have paid your liabilities regularly. In the event of minor financial problems, this can significantly save your situation.
Please note whether you gave consent to the processing of information about problematic loans – if so, withdraw it. For 5 years, BIK will still process information about the loan you were having problems with repayment, but from the 6th year, it will no longer have the right to do so. Thanks to this, this information will not have a negative impact on your history.
There are many ways to build a positive credit history. Start with small steps – like taking something in installments or taking out a small loan, and thanks to this your credit standing will increase. Never take more loans than you can actually pay back. The most important thing in building a good credit history is prudence and common sense!