In the previous article, we introduced a credit score and explained the role it plays in lending. We also promised to give you a closer look at the factors that influence your overall ranking. There are:
The loan does not repay itself, so we determine your income. This is because of your monthly budget, which could be too high repayment burden unhealthy. We will therefore only approve your application for which your monthly payment will not be jeopardized.
Length of your job
However, the amount of monthly income is not the only point we consider. A client who has earned CZK 17,000 a month for four years has a better score in our country than the one who has more, but has only been in position for a month. In short, a stable job position means greater security for us.
Number of dependent children
Children are a joy, but they are associated with a lot of expenses, including unplanned ones. You have to buy new textbooks once and next time the bill for a broken window. Because we do not want to burden the budget of families with children disproportionately, the credit score decreases with the number of children.
Loans to other institutions
You should always take a loan only after you have repaid the previous one. If you are still paying with another banking or non-banking company, it will reduce your credit score with us. We expect that you have higher monthly expenses and at the same time you cannot save in case of problems.
Payment discipline and history
But if you had a loan in the past and repaid it honestly, it would be a plus. It talks about your responsibility and your credit score will increase.
Information from credit registers
Previous repayment problems can complicate your application for a new loan. We always look at the credit register and if we find a loan applicant in it, it will significantly reduce its score. Remember, however, that the registers were created mainly for your protection against falling into a debt trap.
Execution or personal bankruptcy
If you are in financial trouble, do not solve it with a loan – just worry. So if you are concerned with execution or personal bankruptcy, we will not approve the loan.
Now you know what we take into account when considering your loan application using a credit score. In the third episode of the series, we’ll give you 5 practical tips on how to improve your credit score.