Based on the information collected in the credit history, the CCI compiles (calculates) some integral numerical indicator, the so-called credit rating of the client.
In the future, at the request of any bank about a particular client, BKI simply informs him of the credit rating, without other burdensome details. Based on the digital credit score of BKI, banks also decide to issue or refuse to issue certain online credit cards.
How it can ineffectively “work” the credit rating of BKI
All this is done, of course, in order to minimize the credit risks of banking institutions, in order to more efficiently screen out unscrupulous, undisciplined borrowers and fraudulent fraudsters at the stage of loan application. But like any large and cumbersome selection system, the technique of deriving the credit rating of BKI in real practice of application allows many mistakes and mistakes.
Thus, not only a pathologically dishonest borrower, but also a completely conscientious and law-abiding citizen, can “earn” a low credit rating. For example, the most striking example of the recent past is that Ukrainian banks have massively nullified credit ratings (and deprived any chance of obtaining a bank loan) of military personnel of the Armed Forces and NSU, who defended their homeland, risked their lives in the ATO combat.
In addition, even those customers who fall under the classic signs of a defaulting borrower, clearly admitted late payment, are not necessarily the same. A person could just get into the “black lane”, there could be an unforeseen tragic coincidence of circumstances that only temporarily undermined his solvency.
Factors that influence credit history and credit rating
To make sure that not only persistent frauds, but also quite conscientious citizens can “pot pots” with banks, earn a bad credit rating BKI, you should familiarize yourself with the systemic factors that are taken into account when determining it. Banks (BCIs) collect information in credit history about aspects of their clients’ life that are not always relevant to the area of financial lending. So, among other things, they collect information:
- on the presence of outstanding loans in all financial institutions belonging to the association (banks, pawnshops, financial companies);
- about all available places of late payment on bank loans, term of 5 days or more;
- about delinquencies that have occurred on assigned alimony payments;
- about participation in court proceedings, about the presence of open criminal cases, extinguished criminal convictions.
And most paradoxically, even an excessively fast (from the bank’s point of view) repayment of a loan can lead to a downgrade of an individual’s credit rating. After all, banks with such clients are simply unprofitable to deal with, they will not earn much from them!
Where can I get a loan with any credit history ?
So you are an individual and you urgently needed the loan money. You usually go to a bank branch, make a loan application … and get a refusal. As a bank clerk explains, you have a very bad credit history and therefore a low credit rating. You are shocked to go to a bank where the same story repeats, in the third …
Fortunately, the situation is not hopeless. After all, relatively recently, there are quite legal, specialized financial institutions called micro-financial institutions (MFIs) where you can get a loan with any credit history of the applicant, even quite corrupted.