Factors that determine the level of credit rating
There are 5 factors that determine the level of credit rating. Their impact on the borrower’s assessment is expressed as a percentage.
The main indicator of the quality of the borrower’s credit history
Information on the observance of the payment schedule (35%). This is a key indicator for the lender because it demonstrates the financial discipline of the client. You cannot hope for a high score if in the past there were delays in payments or even going to court to collect debts.
The size of existing debts on loans taken (30%). If the debt burden “eats” half of the income, the risk of non-payment increases sharply. The client becomes “not interested” to the bank.
Duration of credit history (15%). Long-term use of borrowed funds indicates reliability, but only under one condition fair repayment without delinquency.
The number of simultaneously open loans (10%). Frequent contacting the bank for a loan indicates financial instability of the client.
Types of loans taken (10%). This indicator is affected by the “seriousness” of the loan. The best option is a mortgage. To obtain it is very careful scoring. Prolonged use of credit cards with an increase in the limit also indicates a good solvency of the borrower.
How to increase your credit score?
Try to check your credit history and eliminate all errors and errors in it. Because of them, the client may be refused, and permanent refusals will immediately affect the quality of the story.
Make payments in a timely manner; demonstrate your good faith in fulfilling your financial obligations.
If you are a co-borrower, then ask about the credit history of your loan partner. His low rating will automatically reduce yours.