Credit rating is increasingly important for consumers as it begins to be questioned by many institutions that sell futures after banks. Consumers who find various attempts to increase their credit ratings know that some details may decrease their credit ratings in accordance with the algorithm used in the calculation of credit ratings, but there is no information on various specific points.
The factors that downgrade the credit rating that can be deducted in accordance with Good Finance’s announcement, which currently explains the credit rating algorithm and the factors affecting the credit rating, are listed below.
Consumers who have credit or credit card debt and who delay the installment payments arising from these debts can witness that the credit rating has decreased significantly since the first delay. If the installment payments are not made 3 times in a row, in other words, in the case of not paying for 3 months, the blacklist is entered. Credit ratings of blacklisted consumers do not occur.
Negative Account Debt Is Not Paid On Time
Most consumer credit deposit accounts think that the money it uses through the account, which is known as negative, does not affect the credit rating. However, the limit defined for this account is also the credit limit and failure to pay the debt at the date determined by the bank will decrease the credit rating.
Making a Minimum Minimum Payment
Continuously paying the minimum amount of debt does not normally lower the credit rating directly, but the failure to pay the entire debt and to transfer some debt continuously to the next month may be considered as a continuously extended debt. In this case, it can be observed that the credit rating, which is due to long-term indebtedness, has increased less than it had to increase after a while and decreased from a different angle.
Consumers can observe that the credit rating has dropped significantly the first time they use a loan. The reason for this is that the debt burden on the consumer increases and this situation includes credit risk for banks and therefore it is necessary to decrease the credit rating. As the debt payment is made, the credit rating will increase.
High Limit Credit Card Usage
A high limit credit card means opening the right of debt up to the limit for the consumer. Therefore, it is a risky situation for consumers to use a loan from a different bank in addition to the existing borrowing facility, and the credit rating may increase up to a certain number as long as the income remains, in other words, it will increase less than it should increase, causing a real decrease in the nominal sense, although a nominal increase.
Increasing the Overdraft Account Limit
Since the desire to increase the account limit, which is minus, will allow the consumer to borrow as much as the amount increased, the debt burden on the consumer will increase. This will reduce the credit rating.
Credit Used Newly
The consumers, whose credit allocation has just been realized, have expressed their problems regarding the decrease of their credit ratings for a few months. This situation is quite normal as can be confirmed from the disclosures made and it is quite logical considering the risk involved in allocating the second loan to the consumer.
New Credit Card Has Been Taken
Providing a new credit card after the credit card application means opening a new debt account on behalf of the consumer. This situation will decrease the credit rating because it contains risk for the loans to be provided. Even though credit card installments have been deposited, the credit rating will be able to increase up to a certain number unless the limit is reduced because the credit card limit will remain constant.
New Opening of Overdraft Account
The overdraft deposit account, like a credit card, allows the consumer to borrow up to its nominal limit as long as it is not canceled. Due to this situation, the credit rating may only increase up to a certain number and there will be a real decline. The decrease in the credit rating of the overdraft deposit account can only be eliminated by canceling it or by making regular and full payments on an ongoing basis.
Rarely Using Bank Products
Banks are skeptical of consumers for whom they cannot collect enough data. Therefore, the fact that banking products such as credit or credit cards were not used in the past will also decrease my credit rating as it will add mystery and doubt to the financial situation of the consumer. Using at least a low limit credit card in simple daily transactions will be useful for keeping the credit rating high.