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The dos and don’ts of credit scores

Got rejected on your much-awaited loan for the latest iPhone? You probably have a bad credit score.

Photo courtesy of Bankrate.com

Photo courtesy of Bankrate.com

Banks or other loan agencies tend to reject loans from borrowers who have bad credit scores.

To put it simply, your history as a borrower could be unpleasant, as your lender sees it.

Having a bad credit rating has its inevitable consequences. This  serves as the borrower’s reputation in the banking community; and getting a bad mark will not get you on a lot of opportunities in the future.

It actually takes simple steps to acquire a good and healthy credit score, according to Home Credit Philippines. Here are some dos and don’ts to keep you on track of your credit rating:

DON’T borrow if you cannot pay back. If you know that you do not have the capacity to pay back, cross out that loan and just take in what you can.

DO borrow what you can afford. It is always important to be confident to repay all that you’ve borrowed.

DON’T miss your payment dues. This is what gives a borrower a bad reputation, and exacerbates one’s credit score.

DO pay on deadlines. Always plan ahead and never ever miss deadlines. Paying on time or earlier enhances your credit score, as it shows a responsible attitude.

DON’T accumulate debts. Borrowing after another without keeping a record is like blowing a bubble and waiting for it to pop.

DO record your loans and as much as possible, keep them to a minimum, and match them with your spending capacities. This is a good practice for good finance management.

DON’T run away from bills and debts. Avoiding and ignoring your lenders will give you a bad credit rating, because this is a sign of delinquency.

DO accommodate calls, emails, and other forms of communication from your lender. Talking with your lender will help you check your loans and open other options.

DON’T default on loans. It shows that you are not capable of fulfilling your responsibilities.

DO keep your end of the bargain. It is important to commit after signing a contract, because it shows your competency as a borrower.

It is important to note that government-owned and -controlled corporation, Credit Information Corporation (CIC) keeps track of all records of borrowers and clients’ credit usage and previous payment activities. It provides financial lenders with secure and reliable information.

These information will guide lenders of their future clients’ capabilities of fulfilling loan agreements, based on their credit history.

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These are some tips provided by Home Credit Philippines, a consumer finance provider that caters to first-time borrowers.

They offer non-bank loans on affordable installments, which is ideal for those who want to begin their credit history. The company also assesses the clients’ payment capacities and tailor payment schemes to help them manage finances properly.

For those who want to acquire loans on gadget and small appliances, Home Credit provides minimal loan requirements and easy application processes.

To know more about Home Credit Philippines, you can visit the website here.