Is bad credit a sentence?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

So you need a loan. After being rejected by one bank, you went to another, but you failed there too. What is the problem? It would seem that you have a certificate of income, and the required amount is not from the category of sky-high. These problems are most often faced by people who have a bad credit history. What does it mean? It's very simple: at some stage in your life you refused to pay a loan or regularly delayed payments.

For banks, a client's credit history is one of the most important criteria. And if you have established yourself as an irresponsible borrower, it will be quite difficult to correct a negative reputation. After all, the bank is not at all interested in cooperating with those people who are prone to violations of the terms of the contract. In fact, your life circumstances for them practically do not matter. Much more important is how reliable you are as a borrower.

How is a bad credit history formed? There are several violations that cancontribute to this:

• Total non-repayment of credit funds (this violation is the most serious, and in the future you should not count on a positive credit decision at all).
• Multiple delays in payments for a period of 5 to 35 days or more (medium violation).
• One time late payment less than 5 days.

As for the last point, it is not considered a violation as such. After all, situations are quite common when a borrower deposits funds right up to the deadline for payment, and they simply do not have time to reach the bank at the right time. Almost no one pays attention to such trifles. If delays for a period of less than 5 days are regular, you cannot call an ideal credit history. However, most banks will see little reason to refuse.

If payments are late for a period of five to 35 days - this is already a bad credit history. However, if the debt was somehow paid off, the bank may subsequently approve your application for a new loan.

Clients who have not repaid loan funds at all in the past are not even considered by banks - they are instantly rejected.

However, a bad credit history can also be in a person who has faithfully repaid the debt to the bank all the time. Obstacles to receiving funds can be litigation, the recovery of alimony, or even such a trifle as a debt to a neighbor.

How to fix the situation?

Many people are interestedWhere can you get a loan with bad credit? Such opportunities can be found, of course. However, it is unlikely that you will be able to cooperate with official structures. And you will have to pay for it. Therefore, it is better to think about how to fix your credit history (or rather, improve it).

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  Visit a bank branch and present evidence that at the moment you have changed your attitude to loans, have become responsible. For example, you can present statements confirming the current payment of various bills (utilities, etc.) over the past few years. A big plus will be the availability of documents confirming high solvency and regular income.

• Explain the reasons for non-fulfillment of debt obligations on the loan (if the reasons were beyond your control and were related to illness, layoffs, non-payment of wages, etc.).
• Another proof of your reliability can be deposit accounts opened in this bank (from 1 year).

Cash loans with bad credit history can be obtained from special services, however, as a rule, you have to pay sky-high interest payments for such pleasure.