What prevents you from taking out a loan? Commonly made mistakes
Before the bank grants a loan, it will carefully check your creditworthiness. Innocent habits and convenience can significantly change the situation to your detriment.
It turns out that it is impossible to escape from credit. Lending and installment systems have accompanied humanity for millennia. They were born in ancient Mesopotamia and Egypt, before the invention of money, when farmers lent grain or cattle to each other.. Land and real estate became security.
A treaty from the turn of the era has been preserved to this day, listing unfair lending practices. The letter clearly prohibited, for example, transferring real estate to other persons that served as security for an obligation.
Despite the passage of centuries, some mechanisms have not changed. In the 21st century, banks also require collateral before granting a loan and carefully screen the candidate for a loan. How to help yourself and increase your creditworthiness?
Banks evaluate the candidate by scoring. What matters is paying your bills on time
The Credit Information Bureau (BIK) analyzes the applicant’s previous loan history and profile and awards points. This procedure has a name – scoring. The higher the score, the lower the risk for the bank, and therefore the greater the chance of obtaining a loan and better financing conditions.
BIK assesses the timely payment of installments and other obligations – e.g. telephone bills, the number and amount of existing loans, the amount of credit card limits. The longer the positive history, the better the credibility. Even submitting loan applications too often in a short period of time is harmful.
Therefore, before submitting a loan application, it is worth paying off as many active liabilities as possible – loans, installments or installment purchases, and paying all bills on time for at least half a year.
Credit card ruins your rating. Salary in a foreign currency too
Credit history is also spoiled by an unused credit card or an account limit – the bank believes that such security can be used at any time and treats it as a monthly charge.
The most reliable contract for a bank is a full-time contract. A civil law contract, especially a contract for specific work, is rated much lower by banks. Some take into account only 50-80 percent right away. income from work settled in this way. When running your own business, the required minimum experience is usually one or two years.
Spending your entire monthly salary is also a warning sign for the bank, so before applying for a loan, it is worth limiting subscriptions, installment purchases and starting to save money.
Creditworthiness is also influenced by the applicant’s age (the fewer years until retirement, the worse), the number of dependents (the more children, the worse) and income in a foreign currency due to exchange rate risk.
