This is a topic for those of you who often deal with credit cards or for the process of repayment and other loans.
Here will be discussed some things that are very important to know by you as the customers because it will relate to the future.
Nowadays it is not taboo if someone will try another credit after he has paid off the credit he already had.
But the question is, does what you propose will be easily accepted by the lender? On the other hand, if you have a good credit history then this will not be a problem.
Because your track record will be archived at the underwriter when you will use the services.
Thus this credit report will provide feedback to prospective lenders whether your submission is accepted or on a decline as well as a basis to provide interest on your loan.
From here the assessment will be done and the results are concluded.
Any data of yourself as a credit customer will have a value as a reference of the guarantor in providing assistance again at a later time.
The function of credit score here is certainly very clear. For lenders will greatly assist the survey process and the amount of loan to be approved.
Likewise, for the recipients of the loan (the customer), the credit score will assist in obtaining wider access to the lender by relying on their own financial reputation without having to depend on the ability to provide collateral.
For lenders, there will be certain criteria that become standard. The following are the credit scoring criteria determined by one of the banks.
- Place of Work (business field)
- Number of self-financing
- Marital status
- Working period
- Relationship with the bank
- The number of dependents
- Types of loan collateral
- The husband/wife profession
- Net income
- Current credit status
- Educational status
- Other Income
- Credit/debit card ownership
- Job title
Any information from the above criteria has different weights. Important information such as the accuracy of your loan payments will have a higher value weight than others.
Like the previously mentioned credit score function, the credit score will help the bank determine whether your loan is approved or not, and also can determine the amount of loan you will get, how many terms you get and how much interest the loan will be.
If your credit score turns out to be small, you may still be able to get a loan but with higher interest, or you are required to provide collateral.
Have you had a bad history regarding this credit score? Don't worry, we will review how to improve your credit score.
How to Increase Your Credit Score
1. Use Credit Cards Regularly
The great effect on your credit score level is the credit card.
So do not be surprised if you want to borrow or purchase on credit, the lender will ask if you are a credit card user or not.
The credit card itself is ideally a substitute for cash as a means of payment. So, if you never use your credit card, then there will be no data recorded in the bank.
You can use credit cards for payments, especially expensive items, such as airfare and hotel payments, or buying electronic goods.
After that, use a credit card for a smaller payment like eating in a restaurant. It can improve your credit reputation slowly.
2. Avoid Delinquent Credit Card Bills
In the use of credit cards, delinquent bills are strictly prohibited. The level of customer credit collectibility is one-way banks assess the quality of a person's credit.
This level is divided into five criteria, ie smooth payments, special attention payments, substandard, doubtful, and bad credit.
Advice for you as a credit card user, try to pay monthly bills of 10% first. But if you are able to pay the full course would be better to avoid the high interest every month.
As with loan installments, make the same effort to pay 10% of the initial bill and pay as many bills on time as possible.
3. Reapply When Your Credit Approval is Rejected
When your loan or credit card submission process is denied, give the waiting period a few months before re-submitting.
During this waiting period, you can check what is wrong with you as a customer.
For example, you have applied for credit of more than 30% of income, or you still have other repayment responsibilities. Try to focus to pay off all your debts first.
Then after that, you can apply for credit card with low limit first. This can be seen as a positive indication to the bank that you are a trustworthy debtor that can help improve your credit score.
Remember that credit cards are just an alternative way of a payment process and not necessarily a habit. And even if you really need to use the credit system over and over again, it's not a problem either. Keep your good credit score, a commitment to it, and consistently to live it. The higher your credit score the faster your credit application will be.