What is a good credit score and how to get it?
29.05.2019 Share +
Perhaps you have heard the term "credit score" many times, but you still do not understand what it is and how it helps or hinders your chances of receiving a loan.
The credit score is extremely important, as it is the main factor in determing whether you will be granted a loan and of what amount. When you are requesting a consumer loan, applying for a credit card or you want to take a mortgage loan, the specialists at the financial institution at which you are looking for the desired amount, are calculating, on the basis of your current status and credit history, your so-called credit score.
What does the credit score stand for?
It is an indicator based on which the financial institution determines whether you are a reliable payer and you can afford to repay the requested loan or not.
Keep in mind that different institutions evaluate different criteria differently. To put it differently - one bank/financial institution can give you one credit score, another a different one.
How can you raise your credit score?
- Always declare true information when applying for a loan.
- The basic rule is to pay your debts in time on all loans. Any delay or skipping a payment automatically aggravates your credit score. The longer the delay, the more negative the effect on your credit score is.
- When you apply for a loan, consider your financial capabilities wisely.
- If you are already struggling to repay your active financial liabilities on a regular basis, applying for a new/additional loan is not a solution. Look for an opportunity to merge your current loans and reduce your monthly installment.
- Even the regular payment of utilities and rent matters.
- Keep a straight record of your tangible assets, especially if you are planning to apply for a loan which requires a guaranty.
- Secure income and high social security are also important criteria that determine your credit score.
Ensuring good financial discipline is especially important for your good credit score. And it is in your hands!
Always update your declared information! Falsely declared data can aggravate your credit score and even be accepted as a fraud attempt.