If we decide to incur a specific financial obligation – credit, loan or installment purchase, in most cases, we will first have to undergo a verification process regarding the data contained in BIK and the registers of economic information offices. It’s about checking your so-called credit history.
What is it and how can we improve it?
A credit history can be defined as a record of the actions of a potential loan – or borrower. Each time we make a specific financial commitment, it is entered in the Credit Information Bureau. Is an institution that monitors information on loans and advances. Banks and financial institutions have access to the data contained therein.
Each person who has made any financial commitments in the past is issued a special assessment, to which the so-called scoring is issued, which consists in determining the customer’s creditworthiness. This system is based on comparing the profile of a given person with the profiles of those who have already incurred specific financial obligations. The timeliness of paying off your obligations is compared here. The more loans or loans repaid on time, the higher the score, and hence – the better the BIK rating. Warning! It is also affected by the frequency of subsequent financial liabilities.
It is not uncommon to find terms such as “good” or “bad” credit history. Much less often, however, is said to be “zero.” A good credit history is when there are information in the BIK registers about previous obligations of customers repaid on time. A bad thing is when taking out a loan or credit was delayed. On the other hand, the zero credit history is defined as the situation when the customer has not incurred any financial liabilities so far. This can be a bit problematic for a financial institution, as it is difficult for it to decide here whether a given client will pay its liabilities on time and whether it is worth risking by granting him a loan or a loan.
What to do to have a good credit history?
The first step is timely repayment. If you plan to take out a loan for a larger amount, it is worth following the number of liabilities we have and the dates of their final repayment. Each of them reduces our credit standing in a way. The best solution would be to wait with taking the loan until you repay your current liabilities. When we plan to contract it, it is also not recommended to make installments in the same period. If we have a credit card and use it only sporadically, it is best to return it to the bank or at least lower its limit.
You should also be aware of the fact that all credit inquiries are visible in the Credit Information Bureau report. The more applications we submit in short intervals, the lower our score will be. Therefore, before we decide to do this, let’s do a preliminary selection and report to only a few selected banks.