WHAT TO DO TO FIX THE CREDIT NOTE?
Each delay in payment on a loan reduces the quality of the credit history. The more delinquencies and the longer their term, the less likely they are to receive a loan. Below, we will tell you how not to tarnish the credit history, even if there are problematic debts and how to proceed if the arrears still happened.
Warning about financial problems
In order not to spoil the credit history, contact the lender as soon as there is a chance of late payment. The reasons can be different: they fell ill, lost their jobs, and their salaries fell. If you warn the bank about possible problems, you can restructure the loan – get a “credit vacation”.
If there are prerequisites for late payment:
• Document the reasons: change of work, decrease of w / n, illness.
• Provide documents that support disability or concern for family members.
• Try to discuss with the bank the conditions for on-lending – to increase the loan repayment period, to reduce monthly payments.
• Ask for a loan holiday.
Banks are willing to go to negotiations, because they do not need bad assets and borrowers. If you simply stop paying and answering the bank’s calls, the debt will go to the category of hopeless, the bank will go to court or sell the debt to the collectors. The court can deprive you of property, and collectors will poison the life of you and your loved ones.
CHECK CREDIT HISTORY
Correction of past delinquencies in the past
Past delays do not affect banking decisions if:
– overdue loans are closed,
– more than two years have passed since the delay,
– you close new loans without delays.
Of great importance is the “depth of delay” – how long the delay in payment lasted:
The longer the delay, the more time it takes to correct it. “Technical” delays up to a month do not matter much. Three to four months of timely payments, the absence of similar delays in the future, and you can safely apply for a new loan. Delay of 30+ days requires a half-year of accurate payments. 60+ days of one year and so on.
For most banks, the most important information in credit history is how you have been paying on loans in the last 2-3 years.
Another thing is with defaults, legal penalties and bankruptcies. These procedures do not have a “statute of limitations” and have a very negative impact on credit reputation.
CORRECTING MISTAKES IN CREDIT HISTORY
The quality of credit history can be reduced through the fault of the bank or the credit bureau (CRB). It happens that the bank sends data to the CRB with a delay or with errors. Sometimes, due to a technical malfunction in your credit history, the data of another problem borrower get.
If a mistake was made in the bureau of credit histories, it is easy to fix it. You write a statement and attach evidence to it that the information in your report is incorrect. Ask the bank to provide you with a printout with a payment schedule or a certificate on the absence of delinquencies.
If the problem arose on the side of the bank, it is more difficult to fix the credit history. For example, to fix an erroneously recorded delay, you need to prove to the bank the timeliness of payments by check. Therefore, for security, save the payments and bank documents. It is these securities that will allow you to prove the rightness and return the status of a reliable borrower.