Bad credit history

Bad credit history

Each overdue loan payment reduces the quality of the credit history. The longer the duration of unpaid debts, the less likely they are to receive loans. Below we will tell you how not to tarnish the credit history even in the presence of bad debts and how to act if delays did happen.

Warning about financial problems

In order not to spoil the credit history, contact the lender as soon as there is a chance to delay the payment. The reasons may be different; they got sick, lost their jobs, their salaries decreased. If you warn the bank about possible problems, you can restructure the loan get a “credit vacation”.
Banks are willing to negotiate because they do not need distressed assets and borrowers. If you simply stop paying and answering the bank’s calls, the debt will go bad, it will go to court or sell the debt to collectors. The court may deprive you of property, and collectors will poison the life of you and your loved ones.
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Fix past delinquencies

The longer the delay, the longer it takes to fix it. “Technical” delay to a month does not matter. Three to four months of timely payments, the absence of similar delays in the future and you can safely apply for a new loan. A delay of 30+ days requires half a year of accurate payments. 60+ days of one year and so on.
For most banks, the most important information in your credit history is how you paid on loans in the last 2-3 years.
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