Does consumer credit affect your credit rating? Of course, consumer credit affects your credit rating. In addition, the rating is also positively affected by the timely payment of all current loans and the minimum percentage of refusals in loan applications. Regular payments that boost your credit score allow banks to trust you. In addition, the reduction of current loans and their early repayment are considered to be factors that increase the credit rating.
How Is a Credit Application Reflected in Your Credit Report?
Applications for a credit, which were made at short intervals and rejected by the Bank, have a negative impact on the credit report and cause a decrease in the credit rating. Frequent submission of loan applications gives banks the impression that the person is not reliable, and therefore almost guaranteed to be refused at the next application.
Do Not Let a Consumer Loan Lower Your Credit Rating
If you already have a consumer loan or mortgage, you should not allow these loans to lower your credit rating. As you know, the factors affecting the credit rating include the timely payment of monthly payments without delay, and in the amount established by the Bank. To avoid any delays in payments, borrowers are advised to make an automatic payment from the Bank account of the required amount to pay for the loan. So, you will save yourself from credit rating downgrade due to various force majeure circumstances.
Apply for the Amount You Really Need
Inflated amounts in the loan application lead to the fact that the debt on the received loans is not paid in a timely manner and there is a threat of credit rating downgrade. That is why it is so important that the persons who request a loan demand an amount that really meets their needs. Borrowers who receive a loan whose amount exceeds their requirements should be very careful with payments so as not to spoil credit rating. All monthly payments must be paid promptly, without delay and in an amount determined by the Bank. It is worth noting that borrowers with a high credit rating are more likely to get a larger loan.
Borrowers who have difficulties with payment of loans are directed by the Bank to refinance or repair of the loan. A new payment plan, which is determined in accordance with the financial situation of the client, formed with the override differences for the maturity and installments. Regular payments after repair allow to raise the credit rating again.