How to Build Your Credit Score?
If the bank rejects your loan application because of your bad credit history, do not despair! You just need to know how to fix the situation. The main thing is to distinguish between your own legitimate opportunities for correction and suggestions for removing unwanted records, which sometimes come from dishonest “assistants”. In the latter case, the borrower becomes a victim of fraud, he or she will spend money in vain and will be left with a damaged credit history.
When you need to fix your credit history
Many borrowers do not have a perfect credit history. The reasons may be different. Sometimes personal circumstances prevent you from making a loan payment on time, sometimes banks make mistakes when forming a credit history, and sometimes the credit history can be ruined by the actions of fraudsters.
Often the credit history worsens due to the fault of the borrower who violated the established loan repayment terms or stopped making payments at all. Illness or other force majeure circumstances may make it impossible to repay the debt in a timely manner. In these cases, it is important to know what to do to improve the credit history and regain the trust of lenders and again be able to take loans on good terms.
How to build your credit history if your credit reports contain errors
If your credit history was damaged as a result of a technical failure or error, it’s easy to fix it. As a rule, the lender who caused the false information to appear is interested in correcting it. Since the credit history is formed by the lender, it is necessary to write a claim for correction of the credit history. The credit history will be corrected by the lender.
Your credit history may also be affected by fraud. This happens when attackers manage to get a loan using a stolen passport or data from it. Recently, such cases have become common due to the explosive spread of information.
That is why experts advise you to regularly check your credit history in order to notice manipulations in time and take actions to build your credit history.
If you find that your credit history contains records about loans that you did not take, you should immediately notify the organization that provided the loan and be ready to prove your innocence. Timely notification will help you quickly fix the credit history and also prevent possible relapses.
In the event that it is inconvenient to contact the bank for some reason, there is a procedure established by law for challenging the information by the subject of the credit history (that is, by the borrower):
- Submit an application to the Credit Bureau with a request to make changes or additions to your credit history;
- In this case, the bureau checks the disputed information within 30 days by sending a corresponding request to the source of formation. But even in this case, the decision on whether to change the credit history or not is made directly by the lender, that is, if the claims are justified, the source corrects the credit history. At the same time, a corresponding mark is made in front of the disputed record for the time of verification.
How can I change my credit history if the bank refused to fix my credit history?
The issue will have to be resolved through the court, the defendant in this case will be the bank. Sometimes, court proceedings can be delayed.
Unfortunately, there are no other ways to get rid of this problem. If the court takes the side of the borrower, the latter may demand material compensation from the culprit for the damage caused. If such a case is considered positively, the court will issue a decision obliging the bank to fix the history.
Can I repair my credit myself?
If your credit history has suffered due to the fact that you violated the payment schedule, you will not be able to apply for the removal of negative information. Information about the delays made will remain in credit history.
However, you can still increase the value of your personal credit score if you follow certain rules and use one of the suggested strategies.
- Small personal loans. The essence of the strategy is that the borrower takes a small personal loan and repays it in accordance with the payment schedule. Conscientious performance of the borrower’s duties is the key to the successful restoration of the damaged biography;
- Credit card. Credit card payments are also reflected in the credit history. It is not difficult to get a credit card: many organizations provide them on the basis of a single application. After receiving the card, you will have to actively use it and do not forget about the need to repay the debt. The more financial transactions you make, the faster your personal credit score grows;
- Small payday loans. Microfinance institutions (MFIs) specialize in providing small-dollar loans at high interest rates but do not impose strict requirements on the identity and income of the borrower. At the same time, information about provided payday loans and their repayment is also transmitted to the credit bureau.
When you use any of the proposed options, you should remember that improving your credit history is possible only when you repay all delinquencies and problem loans. The main thing is to enter the payment schedule specified in the loan agreement so that creditors do not have any financial claims left. If this is not done, it may not be possible to get even a small loan, and all efforts will be spent in vain.
What can I do if I can’t fix my credit history?
Even if it was not possible to correct the credit history using the methods described above, there is still a chance to restore relations with the bank and get a loan.
You can improve your reputation in the following ways:
- open a loan, term deposit or current account in the bank where you are going to take out a loan. Lenders are much more willing to approve borrowers who cooperate with them;
- get a salary card. This option will be even better than opening a deposit. The bank will receive confirmation that the potential borrower has a stable income, and the ability to control it;
- provide the bank with additional guarantees in the form of a property pledge or surety. You do not need to be afraid of this if you are confident in your own solvency. The collateral will help you get a loan on much more favorable terms, as the bank will thus be able to minimize its risks.
As you can see, bad credit history is rarely an insurmountable obstacle to getting a new loan. Practice shows that even borrowers with the lowest credit score can get a loan, albeit on less attractive terms. In any case, before contacting the bank, you should check your credit history and credit score. This will expand your knowledge of your capabilities and help you choose a suitable bank.
Tags: bad credit score, credit, credit score, loans