Everyone has a credit score. How to check it to get a good loan offer.
- What is credit rating?
- Why do you need a credit score?
- How is the credit score calculated?
- How is the credit rating indicator?
- What kind of credit score do I need for a mortgage?
- How can I find out my credit score?
- Frequently asked question: without a credit history, will they give me a mortgage?
- How to start a credit history?
- How to improve your credit rating?
Everyone has a credit score. How to check it to get a good loan offer
Big loans and mortgages are not made for everyone.
The bank assesses the solvency and reliability of the client. If there are doubts about it, the bank will raise the interest rate, limit the maximum amount or refuse to grant any type of loan.
To reduce the probability of rejection to a minimum and obtain the most favorable conditions, you need a high credit rating.
Let’s find out what it is, where to check your credit score, and how you can improve it.
What is credit rating?
credit rating – is the bank’s assessment of a client’s solvency based on information from their credit history. The higher the score, the more favorable the bank is for the customer.
Credit score is calculated based on credit history. The bank or credit bureau decides whether to approve a person for a loan based on their previous loans.
to credit history – It is a list of all the loans that the client has requested and the fidelity with which they have been repaid.
Why do you need a credit score?
Example of a good credit rating from Compare.ru.
When deciding whether to lend to a customer, the individual credit rating is one of the key factors for the bank.
This is a great opportunity for the borrower to look at himself “through the eyes of the bank” and assess his ability to obtain a mortgage or other major loan.
It’s also important to know your personal credit score, because that’s how you’ll spot fraudulent inquiries. A credit score shows all activities related to obtaining a loan. If someone has tried to ask you for a loan,
A high credit rating is more than just a better chance of getting a loan on better terms. Given the pace of development of financial products in Russia, this indicator could become more significant in the next two to three years.
In the US, for example, a person’s credit rating is already taken into account in almost any financial transaction, for example, when setting the rent for an apartment.
How is the credit score calculated?
It is formed from five indicators:
▶ timely repayment of loans
▶ diversification of loans (same type of loans – bad)
▶ length of credit history
▶ age. Under the age of 22 it is difficult to get a loan, but from the age of 28 it is easier
The time since the credit history was updated: new loans have a greater impact on the PCR
How is the credit rating indicator?
Credit bureaus use different scales to calculate credit scores. But the basic is NBKI scale. This is National Bureau of Credit HistoriesThe National Bureau of Credit Histories, one of the largest bureaus of credit histories in Russia, includes several major commercial banks.
Customer information is drawn from the National Bureau of Credit History’s database, based on credit history records. It allows evaluating the solvency of each client in a range of 300 to 850 points.
This is a very poor credit rating. Data from the NBKI.
There are three main levels of credit rating:
▪ 701-850 pointsan excellent score. This qualification can be rewarded with better conditions, a higher loan amount and bonuses
▪ 600-850 pointsA good score. With it, you can expect standard credit conditions at any bank and a low probability of rejection.
▪ 300-600 pointsA satisfactory or low score, which increases the risk of rejection and worsens the conditions of the loan.
To calculate the rating, all credit history records since its formation are taken into account. The national median credit score in June of this year was 632.
As financial knowledge and interest in credit products grow, the national average increases. However, whether or not yours deviates from the norm, nothing happens. It can be lifted. The main thing is to understand how to improve your credit rating.
What kind of credit score do I need for a mortgage?
Depending on the amount and the scoring characteristics of a particular bank, the optimal score varies.
According to unofficial data, Five levels of correlation can be distinguished between the value of the apartment and the most appropriate rating:
▶ less than 1 million rubles: 702
▶ between 1 and 3 million rubles: 709
▶ from 3 to 5 million RUR: 715
▶ from 5 million RUR: 718
▶ In all mortgages: 709
How can I find out my credit score?
Use the NBKI website.
The system analyzes the personal credit history from the database of the National Office of Credit History and gives a score between 300 and 850 points. The service is free.
Sample credit history statement. Specifically, it shows the number of all loans and negatives.
Calculation of a personal credit score on the NBKI website. It is provided free of charge.
You can also find out your credit rating on Compare.ru. The indicator is calculated jointly with the United Credit Bureau (UCB) and the NBKI. It also provides personalized tips on how to improve your score.
▪ Database of the National Bureau of Credit Histories of the Russian Federation: nbki.ru
▪ Credit rating on Sravni.ru: Sravni.ru
Frequently asked question: without a credit history, will they give me a mortgage?
That is the probability there is.
If you do not have a credit history, one of two consequences is possible: you will get a higher interest rate on your mortgage, or the bank will not approve a larger loan amount.
The only thing worse than having no credit history contaminated credit history.
It is not a fact that no bank will approve you for a mortgage without a credit history. You will most likely be approved, but the loan amount will be small and the interest rate will be higher than usual. The answer is likely no if your down payment is less than 10-15%. This is what most Russian banks require to apply for a mortgage.
The situation will be much better if the down payment is 35-40% of the value of the property. But the bank can continue to reject the request for a large amount.
How to start a credit history?
With a little In general, take out small loans and pay them back on time or early.
There are many options for starting a credit history, including:
▪ buy goods on installments. For example, buy a new phone or appliance on credit and pay it back gradually over a set period of time.
▪ Consumer loan from a bank. Let’s say you ask for a small cash loan for consumer needs.
In order not to ruin your credit rating, you must follow two rules: use the funds on your card in a non-monetary way and pay back what you have spent on time.
How to improve your credit rating?
The five best ways:
1. Early repayment of one or several loans previously contracted with microfinance companies or banks.
2. Refinance loan obligations by replacing multiple agreements with banks and MFIs with a single agreement with more favorable terms.
3. Do not accept microcredits.
4. Pay the current installments of the loan contracts diligently.
5. Apply for a credit card, actively use it up to a third or a quarter of the credit limit, making current payments on time.
If you follow these rules, you will keep your credit rating above 600 points and you will be able to use the funds lent by banks with virtually no restrictions.
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