What is a credit score you ask? Well, basically, it determines how likely lenders are going to let you get a loan.
Know that different lenders have their own standards for rating credit scores, but 700 and higher (on a scale of 300 to 850) is generally considered a good credit rating or score.
Lenders typically use your 3-digit credit score to help them decide if they’ll approve you for a loan or credit card. In general, the higher your score, the better your chances of getting approved. Having a good credit score can also help you save on interest rates.
Of course, a specific score doesn’t guarantee that you’ll be approved for credit or get the lowest interest rates, but knowing where you stand may help you determine which offers to apply for – or which areas to work on before you apply.
Desirably, you can improve your credit score if you have a good credit history.
A credit history is an account of how you’ve used your credit over the years. This, in turn, shows your responsibility in repaying your debts. Banks use this history to determine whether you’ll be likely to make payments on time or not.
The problem with the Philippines, however, is that there’s still no centralized credit reporting in the country like there is in the US, where 300 is a bad credit score and 850 is the best.
Because of this, most big banks either rely on an internal database (record of past and existing clients’ handling of both lending and deposit accounts) or external sources. The most common external sources are the Bankers Association of the Philippines Credit Bureau or the CCAP C4 (Consolidated Cancelled Credit Cards) negative file.
Do I have a bad credit score?
As hard as it may be to believe, many people who have bad credit ratings are not even aware of their situation.
As mentioned, there is not central credit association in the Philippines which keeps track of credit data.
In order to find out exactly what your credit report indicates you can apply in writing to view your credit report, a process which generally takes two weeks. I don’t banks would give you details, however.
Nevertheless, say you applied for a credit card in some other bank and you got denied, it probably means you’ve earned yourself a bat credit history. You probably defaulted in a previous bill from another credit card.
If you happen to get a hold of you credit report, then your credit report holds important information about your financial history that lenders can use to assess your ability to repay your debts. In turn they use this information to decide whether they will lend to you.
If you have a negative credit report finding solutions to improve your situation can be difficult.
Here are 5 suggestions that may help you repair your bad credit.
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