What are the credit score and credit history?
A credit score is a numerical estimate based on your credit history. It estimates the current state of credit history and reflects the possibility of obtaining new credit in the future.
Credit history is a borrower’s dossier containing information on best short term loans taken by him and the timeliness of their repayment. It helps a bank decide whether to issue another loan to a client or not. Credit stories are maintained by special organizations, credit bureaus.
Bad and positive credit history
A bad credit history in the understanding of banks is long delays in old loans, credit outstanding, or a large number of simultaneously open loans. New loans for such borrowers will either be unavailable at all, or they will not be issued on the most favourable conditions: as a precaution, a bank will set a high-interest rate and, for example, a large down payment if it is a consumer loan.
Banks consider the active use of credit money with timely loan payments to be a positive credit history.
How to increase credit score and improve credit history?
A good credit history is formed with the active use of credit products and their timely repayment. The degree of influence of events on the state of credit history decreases with an increase in their statute of limitations. That is, the effect of delinquencies in the past will decrease over time, and the recent repayment of the next loan agreement will improve the current state of a credit history. It is worth noting that a large number of simultaneously open loans will lower the current credit score. To improve credit history, it is necessary first of all to pay off current delinquencies, if any, to minimize the number of simultaneously open contracts, and to actively use credit products (preferably small short-term loans), making payments for them in time.
Why a credit score can be lowered?
A credit score includes more than 10 factors that affect its status. A large number of credit history requests or a large number of open loans can temporarily slightly lower the score. To improve credit history and increase credit score, it is first of all necessary to pay off current delinquencies (if any), minimize the number of simultaneously open contracts, actively use credit products, and most importantly, make timely payments for credits.
Credit score control: where to start?
Make sure all documents are safe (credit card reports, credit payment receipts, etc.). All this can help you analyse the state of your financial affairs and understand where you made a mistake, as well as serve as evidence of a mistake in your credit report.
Supervise the monthly expenditures. Thus, you can pay off any existing debt and become one step closer to improving your credit score. Try not to spend the entire limit on your credit cards. It is better to use no more than half the available amount from two cards than to reach ceiling on only one.
Where to get a loan with bad credit history or without a credit history
How to get a loan if a credit history is bad or it simply doesn’t exist yet? Banks are wary of new borrowers who do not yet have a credit dossier. Banks are likely to refuse, but loan companies can come to help. Approving a loan with a bad credit history or without it is part of the loan companies’ business. In a loan company, you can take money quickly and easily. By timely repaying a loan in a loan company, you get a real chance to restore your financial reputation and improve your credit history for future loans.
Ways to get a loan from a loan company:
- – in cash;
- – to a credit card;
- – to a digital wallet.
Why it is convenient to use the loan company services
There are several reasons why you should choose the services of a loan company:
- quick loan;
- you can get a loan without a credit history;
- you can get a loan with a bad credit history;
- minimum documents;
- no guarantors;
- both official and unofficial income are allowed;
- women on maternity leave may also receive a loan;
- age category – from 18 to 65 years old.