The majority of the population, or 58%, has a good credit rating, and the pandemic has not significantly affected their ability to make payments in a timely manner, while 34% of the bank loan will not be available at the present time due to their low credit rating, according to CIB statistics. (KIB). December informs Citadel Bank.
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During a pandemic, the percentage of late payments is not increasing – on the contrary – late payments in all credit rating groups are lower this year compared to last year, according to KIB statistics, which assesses more than 60 days of trends in late payments to individuals since July of last year. For example, in August of this year, payments were delayed by 13% of the population with the lowest credit rating and the percentage incomplete with the highest credit rating, while in August last year, about double that – 29% and about 2%, respectively. On a scale from A to E, where A is the highest and E is the lowest credit rating, A currently has a credit rating of 31%, B – 27%, C – 9%, D – 10% and E – 24%.
“It is important that citizens understand the principles of credit rating, as well as the chances of improving it, because this will allow them to choose the most suitable lender and get the best terms. Often people with a lower credit rating are late in paying, and additional loans are difficult to obtain.” Said Vladislav Mironov, Member Citadele Bank Board of Directors: “A good credit rating means that by applying to the bank for a loan, a person will also receive a lower interest rate offer.” It states as an example that in the case of a very good credit rating, Citadele can obtain a consumer loan With an interest rate of 9.9%, but for a car loan – 7.9% As a result, Citadele Bank has compiled recommendations and financial habits to obtain a better credit rating.
Even the smallest loans matter
The credit rating takes into account all outstanding and repaid loans both bank and non-bank – credit cards, lines of credit, consumer loans, and mortgages, as well as goods paid off.
Total credit liabilities
The total amount of total liabilities and their ratio of income is important to creditors. You shouldn’t forget about guarantees, too. It must be emphasized that the credit rating will improve upon loan repayment, while non-bank credit obligations are assessed in particular.
All invoices are just as important
Payment history forms a large part of credit rating. There are no unimportant bills, and timely payment of your mortgage loan and current electricity bill is just as important.
More is not better
Each credit card, even with a small balance, is like a separate loan. Five credit cards are five loans, so the need for each loan must be carefully considered.
Applications and goals
Apply for a loan only when you really need it. Every new loan application affects your credit rating. For example, 10 loan applications per year show that you are desperate for an opportunity to borrow. Also choose the type of loan that best suits your needs. For example, a student loan and credit card from a lender position is more understandable than two consumer loans.
Credit rating can be improved by showing lenders a clear and transparent income structure. Deposits from relatives or cash contributions will not be a sufficient basis for a loan.
Track your credit rating
Before applying for a loan, assess your creditworthiness, for example, on the Citadele website or the KIB website. If you are concerned that your credit rating may not be as expected, please contact us in person. It is possible that you have forgotten some obligations yourself, or another loan that has been paid off will not be recorded as settled.