How to improve your credit rating

Arrows upwards - creditworthiness

Your creditworthiness or. Creditworthiness usually determines whether banks or other financial institutions will grant you a loan. Even if you otherwise meet all the conditions for a loan, the answer can sometimes be negative due to your creditworthiness. Today, we'll discuss credit scores, what they're all about, and how to improve them so you can get the credit you want.

What is a credit score?

Your credit score results from the analysis of all factors related to your financial behavior. A good credit score or. A good credit rating is an important feature that will help you get a loan. If you want to make sure you qualify for a loan, check your debt report. The debt enforcement statement is often used by banks in switzerland to assess a consumer's credit risk.

If you don't have an ideal credit report, you should work to improve it. In the following, we present some options for doing so:

Timely repayment of other loans

If you still have an outstanding loan, be sure to make your payments on it on time. This is important because late payments have a major negative impact on your credit score. So if you pay your installments late, this will be recorded in your debt collection statement. Banks see a bad debt collection record as a warning signal, as they consider the risk of not getting their payments back from you on time to be high.

The same applies to past loans. In the debt collection statement namely all past financial data are stored. As a rule, past entries are deleted after 5 years.

Avoid frequent credit inquiries

Repeated credit inquiries also contribute to your credit report, especially if you receive rejections. Basically, the more rejections you receive from lenders, the more you signal to the bank that something is wrong with your credit score. In emergencies or if you only need a small amount of money, you can consider taking out non-bank loans. However, if you prefer a bank loan, you can check directly with the bank branch concerned whether you meet the requirements before submitting a request.

No credit history? Get an!

A special situation may arise if you have never taken out a loan before. Even then, you may not have the best possible credit report. Banks tend to be reluctant to trust an applicant with no credit history, as they have no information on how reliable they are.

Therefore, it is important to build up a credit history. For example, make a small new purchase with 0% financing where you pay back all installments on time. This is the cheapest and easiest way to build a positive credit history and improve your credit score.

Rescheduling of loans

It can be difficult to make all payments on time, especially if you have several loans running in parallel. One solution to this problem is to restructure your loans, which will benefit you in many ways.

With a debt restructuring, you can consolidate open liabilities that you have to pay into a single loan. This will help you keep up with your payments, which is the most important step in improving your debt collection record.

Choose loans with short terms to start with

If you have a bad credit report, banks are unlikely to give you a loan for large amounts of money or with very long terms. One way to improve your credit score is to opt for loans with short terms and make repayments on time. With an improved credit report as a result, banks are more likely to trust you with large loans.

Check your debt collection statement thoroughly

Even if you think you're the perfect candidate for credit, keep in mind that the debt collection report stores a lot of data about your financial behavior. Therefore, it is important that you regularly check your debt collection statement to have potential false entries deleted.

If you urgently need a loan, you can also consider taking out loans from non-banks. Although a credit check is also carried out here, this is quicker.

Follow the above tips you can obtain a good debt collection statement that will vouch for you when you request a loan. In the future, if you take into account all the aspects that go into the debt collection statement, you can maintain a perfect credit score.