Everyone who is planning to submit a loan application in the near future should be interested in the subject of creditworthiness. It is a measure based on which the bank decides to grant a loan. Check how to gain in the eyes of the lender. Here are the 9 best ways to improve your credit history!
Credit standing not only for the sensible
Creditworthiness is nothing more than the borrower’s ability to repay the obligations incurred on time and interest accrued. Thus, it is the key and most important element assessed by the banking institution during the examination of the loan application. Interestingly, each bank has its own way of calculating creditworthiness. However, they share the same thing. Namely – when calculating the loan, they take into account, among others: regularity of monthly income and financial burden, marital status, age, education, professional status, credit history, as well as the number of persons per household.
That is why we will now consider how to improve your creditworthiness. Of course, the easiest way is to change your job for a better-paying job, pay off all payments on time or reduce your daily living costs … Fortunately, these are not the only solutions!
Organize your home finances!
Farewell to outstanding loans and advances? Just like that! Additionally, include a credit card which, even if you don’t use it, effectively reduces the amount of credit available to you. Therefore, the best way is to make a list of commitments. It is worth planning your upcoming expenses and paying them back ahead of schedule. Thanks to this, the data that will appear in the BIK or KRD register will be updated, and in the eyes of the lender you will present yourself as an honest customer who approaches the issue of finance with caution.
However, if you have a problem with settling overdue and ongoing liabilities, try to extend the loan repayment period. This way you can reduce the monthly installment and your home budget will catch some “fresh” breath!
Get married or sign a dash note
It is true that taking out a mortgage should not be the main indicator of getting married. However, having it in your plans, it is worth considering immediately submitting an application for joint property. This is also crucial in the event of any complications in the relationship or divorce. In this case, however, it will be necessary to provide fixed income in the Polish currency, seniority and employment contract document.
Sometimes it can happen that a negative credit history of a partner significantly limits or even prevents taking a loan. Then the best option is to make a separation of property. In this way, the bank will not consider the “problem” spouse. Just remember that most lenders recognize separations lasting more than 6 months!
Find an additional guarantor willing for a loan
Although this is not possible in every situation, some financial institutions allow the applicant’s debt to be guaranteed. All you need is that your loan partner will have a positive credit rating and the bank will reward you with higher funding.
Instead, avoid suspicious loans from an unreliable source that offer support against your apartment/house. Most often they are scammers who secure a loan several times higher than the debt! We wrote more about this at the link.
Get to know your future lender in advance
Bankers and financial advisors are people like us! Therefore, if you already have a bank in which you intend to apply for a loan, set up an account there and make a transaction at least six months in advance. For the bank, this will certainly be reflected in the loan interest rate. Some of them offer their regular customers a lower margin and also look more favorably at conducting loan negotiations.
Do not submit multiple loan inquiries at various banks
Maybe you are not aware of it, but your every request in a new bank does not increase the chance of finding the right loan. In practice, each such approach reduces the BIK rating by 15 points! Of course, two or three queries will not cause a radical cut, but five or six, yes.
It can also affect the amount of the margin and also significantly reduce your credit standing. In addition, going from bank to bank often raises suspicions about the applicant’s intentions. Mortgage specialists recommend that you do not submit more than 3 applications per month!
Use additional bank products
The so-called cross-selling, ie the sale of additional products such as life insurance, deposit or savings account for the main product will allow you to get a loan on preferential terms. You can talk about a promotional margin, which is associated with a lower interest rate.
This above-plan method is worth using, especially when additional products after recalculating the entire loan period contribute to its significant reduction. It happens, however, that choosing additions will require commitment and discipline. For example, you may need to make monthly payment transactions for a specific amount, and a problem with their execution may result in a return to the standard margin.
Monitor yourself in BIK
As you have already learned, all information about repaid and unpaid liabilities ends up in the BIK, KRD or BIG InfoMonitor databases. Despite all this, banks and loan companies most often visit the Credit Information Bureau.
Therefore, by creating an account in one of the mentioned registers, you are able to monitor your situation on an ongoing basis and assess the chance of a possible loan.
Plan ahead than you think
Remember that it is worth getting interested in such an important topic as creditworthiness even a few months before applying for a loan. Thanks to this, you will avoid unnecessary stress and in the meantime use treatments that will increase your credibility in the eyes of the lender.
In turn, the credit history itself is best to be interested a few years back. Various financial products regulated over the years will certainly affect the overall picture of your finances.
Talk to a credit counselor
Banks use similar calculations when verifying the application, but their method of operation is different. This means that in different banking institutions you can meet with a completely different credit assessment.
Therefore, before making a decision about choosing a specific bank, familiarize yourself with the various offers. Also, go to a financial advisor who will calculate your creditworthiness without checking in the BIK database. This knowledge will be useful in planning further credit steps.
As you can see, you have many possibilities thanks to which you can improve your image as a credible borrower. You also know what to work on to make it even better. Take care of her as soon as possible, and waiting for a credit decision will be without stress and uncertainty.