How a Credit Card Builds Our Credit History – Financial Portal

Certainly, anyone who has applied for a loan at the bank at least once knows perfectly well that banks accurately screen the credit history of their clients. And all this thanks to the data collected and processed by the Credit Information Bureau, which for over a dozen years, helps banks and credit unions in better assessment of their clients. It was on the initiative of the banks that the Credit Information Bureau was set up, all to minimize the risk associated with granting loans. Thanks to the data in this institution, banks can very quickly check whether their client currently has loans, how much they pay installments, whether they are paid on time, etc. Moreover, he can check if he has had debt in the past, and if so, how he paid them. It can be assumed that if the bank determines that the client who filed an application with them does not pay off the debt on time, he will have considerable problems with obtaining another loan. For the bank may say that there may be problems with the new loan, so it may say that the risk is too high.

Interestingly, banks also have a considerable “problem” with people who want to apply for a loan for the first time. And all because their credit history does not exist and banks can not tell if a given client will pay off their liabilities or not. Therefore, anyone who intends to apply for a loan in a bank or SKOK in the near or distant future, should do everything to firstly have a credit history and, secondly, to make it as good as possible. The credit card is a great way to do it. Thanks to her skilful use, we can get a good credit history, thanks to which we will not have any problems getting a loan from the bank.

At the very beginning, we can apply for a credit card with a low limit at the bank. Banks usually accept such requests positively, so a few days after submitting the application, and our portfolio should appear a new “plastic”. We do not have to pay for the card if we make a few transactions each month. We also have nothing to fear that the interest rate on credit cards is high. What’s more, if we use the card in the right way, we can get a free loan and even earn a card on the card. Above all, we must remember to only make non-cash transactions with the card. Let’s pay with credit card only for shopping in stores or online. What’s more, as soon as we get an excerpt with the transactions carried out, let us immediately repay the entire debt. If we do, we will not have to pay anything for the transactions and money we have borrowed. And all because the banks “join” the so-called interest-free period (usually from 50 to 56 days) and if we repay the debt during this period, we do not have to pay anything for it. And how to earn a credit card? Very often the cards “attached” are all kinds of loyalty programs, thanks to which we can buy cheaper in given stores, we can receive a partial refund for purchases, etc. This will save you a pretty good price during the year.

 

However, if we want to build a credit history, the most important thing for us should be the debt that we generate on the card to be paid on time. Thanks to this, our file in BIK will look more and more, and our point rating will constantly increase. And then we have a good chance that first we will get a loan from the bank, secondly it will not require a large security, and thirdly, we can get it on better terms.