The problem associated with too low creditworthiness affects many people in our country and not only those at the beginning of their professional careers. It is enough if we have irregular income, no permanent job, uninteresting credit history or other financial obligations and we cease to be fully reliable for banks. In this situation, it is very difficult to receive financial assistance, so you should improve your ability or look for alternative solutions.
What can you do to improve your credit standing?
• Get rid of unnecessary obligations
Creditworthiness depends on many factors, and any type of financial burden will be one of the most important. It is worth looking at your home finances from this angle, remembering that each credit product reduces the available amount of the next loan, and sometimes even prevents it. According to banks, having a credit card or debit limit on a private account means that you can reach for such financial support at any time, which has an impact on reducing your current creditworthiness. As you can see, it doesn’t matter if we use this option, but the fact that such a possibility exists is important. It’s good to give up credit cards and limits, and pay off other loans early. If this is not possible, then consolidation of all liabilities should be considered, because it will also increase creditworthiness.
• Ensure a good credit history
If you are serious about how to improve your credit standing , then before submitting your loan application, look at bik.pl to order a report including credit risk assessment. It is also a chance to correct any irregularities in the data. It just so happens that some institutions delay a few months to delete out-of-date credit obligations. Many people also forget that the lack of any credit history is not a factor in our favor, because the potential lender will not have any information about our repayment. Therefore, it is recommended to take some small consumer credit earlier and pay it back on time, which will increase the scoring. We should also remember not to submit loan applications to more than three banks, which could result in a lower score.
• Find a reliable co-borrower
It should be noted immediately that it does not necessarily have to be someone from the family. It is important that he has creditworthiness . Banks will definitely verify it exactly. In the case of older people, it is good to check whether a given bank will shorten the loan period due to age.
• Decide on fixed installments
The bank calculates our creditworthiness according to the first installments. With decreasing installments one should take into account higher initial installments by about 20-25% in relation to fixed installments. Therefore, your creditworthiness may be worse. Of course, fixed payments mean higher loan costs , but when you have to consider every factor that increases your creditworthiness, they prove to be the optimal solution.
• Extend the loan repayment period as much as possible
Loan repayment time matters. Of course, a longer loan period is associated with higher costs of servicing the loan, but at the same time a reduction in monthly capital and interest installments, and this directly affects our creditworthiness. Young people for whom banks can calculate a maximum period of up to 35 years will be in a more convenient situation. Loans are usually granted for a specified period, in which the borrower turns 70-75, it is rare that this period is extended to 80 years of age.
• Take care of your own contribution
This situation applies to mortgages . Currently, you will not get a loan without an own contribution of up to 20%, but it is worth remembering that each additional amount of own contribution means a more attractive loan offer, lower interest rate, lower interest costs, and at the same time a lower credit requirement.
• Select the appropriate currency
The currency of the loan also affects our credit standing. Only a few years ago loans in USD were more expensive, but now this trend has changed, which is due to the increase in the Swiss franc exchange rate. Now, to get a foreign currency loan , you need to show higher creditworthiness. A much more profitable option are loans in USD.
• Think about cross-selling
Cross-selling is the sale of additional banking products when taking a loan. It is usually about insurance or deposits. The use of such an offer often allows for a reduction of the margin or interest rate , and, as a consequence, the possibility of taking a loan, also for a larger amount.
What to do when our creditworthiness is still too low to receive a loan?
Contrary to appearances, we are not in a losing position and we can get a proper loan despite the lack of creditworthiness. In this situation, consider proposing a loan from a private individual or non-bank companies that provide unregistered loans. The loan granting process is very simple and quick, procedures are definitely friendlier and extremely attractive conditions can be agreed.