How to improve your credit rating

By Galina Shoteva · April 25, 2019 · 2 min read
How to improve your credit rating

The credit rating evaluates the creditworthiness of a borrower and represents his ability to repay the borrowed funds on the day the loan matures.  One doesn’t have to be a credit expert to know that keeping your debt low and paying the contributions to your current loans in a timely matter, are the sure ways to improve your rating. But these aren’t the only ways to do so. These less known methods can also do the job:  

1. Consider the usability of your credit  

The usability is a factor that represents how much of the funds from your credit card are used compared to its limit. The smaller this percentage ratio, the better for your credit rating.  

2. Apply for a new loan  

An indicator of good financial discipline is when you have a number of credits which are all regular. When reviewing your loan application lenders check your credit record in the CCR, which holds information for all of your current loans, as well as information about already repaid loans dating back 5 years in time. And the fact that you all your current loans are regular gives you a greater chance at receiving financing when you are in a need of such.  

3. Renegotiate or restructure your current loans  

You can negotiate the interest rate or period of your loans so that they could meet your current needs. For example, if you are having a hard time with the repayment of your monthly installments, you can discuss with your lender an option to lower your installments and extend your loan term. You can also restructure a mortgage loan into a consumer loan, or if you are late with your payments, then you can restructure the overdue amount to become part of the principal.  

4. Refinance  

If you have more than one loan then you might find it difficult to keep track of all contributions and you might happen to forget a payment. In this case, a good option is to refinance all your obligations and even try to negotiate a better interest rate. Refinancing is a good option and when there are changes in the market interest rates and you can negotiate better terms with another lender.  


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