Many people are familiar with the concept of "credit". In most families, at least one person borrowed money from financial institutions. But the borrower does not always adequately assess his capabilities, resulting in delays and outstanding bills. Failure to meet your obligations leads to a damaged credit history, which further minimizes the likelihood of approval of the next loan. In addition, the bank has the right to charge fines and pen alties, they will have to be paid along with the amount taken and interest.
A trip to history
The history of lending began in the 3rd century BC. e., in ancient Egypt. At that time, loans were taken only in case of emergency, and if it was impossible to repay the debt, the borrower fell into slavery.
In Russia, moneylenders initially began to lend money, they took high interest for their services, they were approached by both peasants and impoverished nobles. Failure to pay such a loan could lead to debt, and the peasants were forced to become lifelong laborers.
In the XVIII century beganthe first state banks appeared, their loan interest was significantly lower than that of usurers, but not everyone could get the necessary loan there. Preference was given to landowners and merchants. At the same time, the state banned private loans with a profit on it. And only a century later, the Peasant Land Bank was opened, where ordinary people could take out a loan to buy land from landlords.
What is credit history
Credit history is a person's financial record. Every citizen who at least once took a loan or applied for it, but did not receive money, has it. What is a bad credit history?
Initially, if a person had no loans, it is zero. After receiving the first loan and successfully fulfilling its obligations, it becomes positive. If the borrower regularly delays payments or stops paying at all, his file deteriorates.
- The credit history stores information about all repaid loans and those that are currently available. The systematic collection of these data in Russia began in 2005.
- The credit bureau records all applications to financial institutions and decisions on applications.
- The dossier also contains information about organizations requesting a review of the clinical trial.
- Each loan has detailed information about the number of required payments, their timely repayment and the status of the debt.
- Additionally, the file contains the full name of the citizen, the address of registration and residence, passport data and phone numbers.
- Sometimes CI also includes unfulfilled obligations for housing and communal services debts and alimony.
Organization can access credit history only with the consent of the borrower. And consent is confirmed with a regular or electronic signature.
As of July 2018, the state register of the Central Bank includes 13 organizations collecting information on Russian loans. The largest and most popular of them:
- United Credit Bureau;
- "Russian Standard".
Bureaus may contain incomplete information about all loans of a person, because each banking organization cooperates with different institutions. Because of this, it may happen that the lender does not see any outstanding debt of the borrower. But all credit and microfinance organizations that have a state license are required to enter changing information within 10 days from a specific moment.
Credit histories are kept by the bureau for 10 years after the last change.
How do I know if my credit history is bad?
Financial literacy in Russia is still at a low level, and many borrowers do not know that they, like lenders, can find out their credit reputation. This right is useful to understand why lenders are refusing a loan or to correct incorrect information.
Any person has the right once a year to receive his dossier free of charge. For this hefirst you need to find out in which bureau it is stored. You can do this by contacting the Central Directory:
- An individual, having learned the required information, can send a request via the Internet to the Central Bank using a special code that acts as a pin code.
- It is possible to obtain information through credit and microfinance organizations, credit cooperatives and a notary. In this case, providing the subject code is optional.
Many banks and MFIs provide a paid service for obtaining their history. This procedure can be repeated as many times as needed. In some credit institutions, this is done through a personal account.
There are many online intermediaries who, for a specified fee, will help a person find out if he has a bad credit history or not. These sites perform the same function as banks: they send a request, but they cannot influence the current situation in any way.
Causes of broken CI
Financial reputation varies from different circumstances, and not all of them depend on the debtor. You don't have to be a bad debtor to have a bad credit history. To fix it, you need to know the reason for the negative status:
- Defaults on financial obligations are constant long delays and debts for which payment is not made at all.
- Frequent referrals and many loan applications in a short amount of time. Banks see a worrying trend whenthe client constantly applies for money in debt, suspecting that he has an unstable financial situation and an irresponsible attitude towards money.
- Often, credit organizations do not even consider a borrower if he was previously denied by several institutions.
- Premature debt repayment. Bankers receive interest on the money lent, the faster the client repays the loan, the less benefit the other party to the contract will receive. Sometimes creditors consider this reason as the inability of the counterparty to calculate their finances correctly.
- High credit burden. For comfortable repayment of loans, an individual should not spend more than 30-40% of income on paying. Banks and MFOs check the real financial situation of the client, the debt burden negatively affects the credit history.
- Spoiled credit histories by banks. Usually the human factor plays a role here - the manager of a financial organization forgot to transfer the repayment data, the loan balance was not written off on time, etc. There are situations when bank employees made a typo in the name or passport data, after which the debt was recorded on an outsider.
In some cases, it is possible to correct a damaged credit history. What to do, tell the reason for the refusal. But in any situation, the reputation will not recover immediately.
- If the lender refuses due to constant delays, you need to show your correction. This requires at leastsix months to make monthly payments on time. It is acceptable to take a small loan and repay it on time, but not prematurely. A few of these loans will create a positive trend in a damaged credit history.
- The reason for the many applications is solved simply - for some time it is better to refrain from contacting banking institutions.
- It is not recommended to repay long-term loans earlier than six months after registration. If you need a large amount of debt, it is recommended to initially take a small loan for a long period and repay it according to the payment schedule.
- To reduce the financial burden, you should apply for refinancing of loans to an organization providing such a service before delinquency.
- If the mistake was made by the bank, you must draw up a statement indicating the problem and send it by mail to the credit bureau. This organization will transfer the claim to the creditor, after which the issue will be resolved in favor of one of the parties to the agreement.
How and where to get a loan with bad credit?
There are many financial institutions, they all fight for customers, so sometimes they are ready to give relief even to borrowers with a negative credit history. Naturally, the reasons for this status play a decisive role. But you can almost always find an option.
So where can I get a loan with a bad credit history for a person who has problems with responsibility in relation to his obligations?
- Small and young bank. It is hard for such organizations to compete with sharks.financial industry, they are more loyal to their customers.
- Issuing a credit card. It is unlikely that a large limit will be approved, but having shown its reliability, over time you can count on its increase. Banks have minimum application requirements for this product.
- Commodity credit. To apply, only a passport is required, and credit history is checked by scoring, it will not be studied in detail.
- Microfinance companies also issue urgent loans to clients with a damaged credit history. The risk of default is built into their high interest rates.
- Loan brokers stock a wide range of financial institutions and products, often with private lenders as well.
What is the disadvantage of bad CI
Most often, a negative credit record due to delinquency and non-payment is formed among young people who do not take the possible consequences seriously.
Sometimes the mistakes of youth can harm the future. It is likely that, having matured and married, the newly-made husband and wife will want to purchase housing. You should not count on a mortgage loan with a damaged credit history, as information on such applications is checked very strictly.
The same will happen in any unforeseen difficult situation that requires money - a large organization will not approve a loan.
There is a possibility that when applying for a job, the security service will not let the debtor through, especially if he is applying for a managerial position or a position that gives access to financial resources.
The percentage of failure in the policy of insurance companies is also great. An unreliable client can fake an accident or an accident.
Beware of scammers
In a situation where the debtor has tried everything, money is needed, and getting a loan with a bad credit history does not work, there is a high risk of running into scammers who take advantage of a person's illiteracy and difficult situation.
Scammers will claim that they can make changes to the CI, or they will offer to help with loan approval, arguing that they have their own people in banks. Indeed, in some situations that are not running, someone can influence the security service of a credit institution to turn a blind eye and let the debtor through. But this means that the borrower can just as well try it himself, without paying fabulous kickbacks.
In all other cases, when they are asked to send documents or pay money in advance, you should immediately stop the dialogue, and even better, report it to the police.
It is possible to get a loan with a damaged CI, but for this you will have to direct your efforts to fix it and wait. In the meantime, it is best to apply for a loan from relatives who will definitely not require interest.