Credit history – what is it and why does it matter for banks?
Credit history is a list of all of our financial liabilities that went to the Registry of the Credit Information Bureau. In Retrodatabase, you can see information on loans, borrowings, credit cards and installment purchases. The credit history has a big impact on the assessment of our creditworthiness by banks, i.e. determining whether we will be able to repay the loan taken on a specified date.
Each financial institution that decides to verify us in Retrodatabase will receive information such as:
- the number and type of active loans and the amount that we spend monthly to pay installments,
- queries to Retrodatabase about our data from the last 12 months,
- timely repayment of loans and borrowings,
- conducting debt collection or debt enforcement proceedings against us.
Retrodatabase collects both positive and negative data that make up our credit history. Among other things, our Retrodatabase scoring is created based on them. The analysis of the client’s past commitments history is one way to limit credit risk. If in the past we have been paying off debts conscientiously, there is a high probability that a new loan will not be a problem for us.
How to check your credit history in Retrodatabase?
You already know that your credit history is key to getting a loan, but do you know how to check your credit information bureau? You can do it without leaving your home! All you have to do is create a Retrodatabase account, successfully log in and check how to download the Retrodatabase report. The basic version of the report can be downloaded for free once every 6 months, but if you want to check what the banks know about us, it’s worth choosing the paid version for 39 PLN.
Credit history can change quickly. If we need a loan for anymore, it is worth paying attention when Retrodatabase updates the data and when we can apply for possible removal of negative information. Updating data about us in Retrodatabase may take up to 14 days from settling the debt. Credit inquiries are visible in Retrodatabase for 12 months, and data on late payments over 60 days can be kept by Retrodatabase for up to 5 years. Removal from Retrodatabase after the timely repayment of the debt occurs immediately after the commitment is closed, unless we agree to the longer processing of data. Remember that the more information about repayments on time, the better.
How to build a positive credit history?
Building a credit history is a process that should be started immediately after coming of age. Is the type of financial liability important for our creditworthiness? Here sentences are divided. An ideal bank customer is definitely a person who has experience in borrowing large sums. Let’s be realistic though – it is hard to get a loan at a bank for young people who have just started work and do not have high creditworthiness. How do you get your first loan?
A positive story at Retrodatabase will help me build small loans, such as payday loans for 18 years, credit cards, account limits, installment purchases, etc. The longer your credit history, the better your chances of getting a loan. The most important is not the type of loan but its timely repayment.
Proven ways to build a positive credit history:
- Borrow often but wisely – if you earn little, it will be wise to borrow small amounts for which you have sufficient funds to repay.
- Check if non-bank loans are visible in Retrodatabase – many non-bank loan companies do not cooperate with the Credit Information Bureau. In this case, our payday loan will have no impact on building your credit history.
- Do not take several large loans at the same time – it is a risky way to build a credit history. The more active liabilities, the lower the creditworthiness and chances of a loan in the event of an unforeseen accident. In addition, monthly installments will absorb a significant portion of our income, which can lead to financial problems.
- Apply for a loan only where you have a chance – every rejected request for a loan negatively affects Retrodatabase’s credit history. The more banks reject our application, the less chance that the next financial institution will find us trustworthy. Inquiries in Retrodatabase are visible for a year, but we can apply for their earlier removal (updating the data in Retrodatabase will take about 1-2 months).
- Do not allow late repayments – financial problems can happen to any borrower. If they also meet you, inform the bank or loan company about the troubles. Consultants will help find a solution to the problem, e.g. extension of repayment deadline, rescheduling or credit holidays.
- Overpay the loan when you have the opportunity – early repayment of the loan not only positively affects our credit history, but also rapidly increases our creditworthiness. Faster repayment of all or part of the loan will also reduce the cost of the liability, i.e. APRC.
- Check your credit history – downloading the Retrodatabase report and enabling the Retrodatabase Alert service will allow you to quickly notice delays in repayment or outdated information about our loans. Make sure to delete data from Retrodatabase after repayment of each loan and clean Retrodatabase from credit inquiries (a sample letter is available at www.Retrodatabase.pl).
- Do not forget to consent to the processing of repayment credit data in Retrodatabase – not everyone knows that Retrodatabase stores data on repayment delays much longer than the information on loans repaid on time, which disappear almost immediately. Without this consent, the banks verifying us in Retrodatabase will only see information about active or delayed settled debts.
What bank will grant a loan with a bad credit history?
When an immediate cash injection is needed, many people search the Internet for answers to the questions: “bad credit history – where will I get a loan?” Or “which bank is not looking for Retrodatabase queries?” It all depends on the selected product. We have no chance for a consolidation loan with a bad history in Retrodatabase, but a mortgage with a negative Retrodatabase is already a little more probable if its collateral will be a valuable property.
Usually, the only way to get a loan with a bad credit history is to use the services of non-bank companies. They use internal methods of customer verification and can independently decide what level of credit risk they accept. Payday loans for people with a bad credit history are usually slightly lower than standard offers. Customers seeking a loan with a bad history should consider setting up a car loan collateral or establishing a guarantor.
Bad credit history or no credit history – what’s worse?
Contrary to appearances, people who managed to get out of the debt spiral arouse greater confidence of banks than people who have never borrowed before. Empty Retrodatabase is a problem especially among young people who are just entering the world of finance. Lack of credit history can exclude our chances of a loan, even if the monthly income would allow timely repayment of installments. We have nothing to count on at a bank with no credit history. That is why customers often decide to pay payday loans without checking their credit history online, the granting of which depends solely on the client’s monthly income.
Some lending companies even have a non-bank credit card without Retrodatabase, which works like a revolving loan. Even a short credit history is better than the lack of it. If you do not have any experience in borrowing, the only option available may be loans without Retrodatabase. The companies granting them either completely resign from client verification in Retrodatabase or do not attach much importance to the information contained therein.