Improving your credit history by borrowing money at MFI
There are lots of various problems in life that can prevent you from paying off the loan or a credit on time. Unforeseen expenses, urgent payments and a penalty fee, which is veiled in the loan agreement, are the most common causes. That’s right, no one has canceled bank tricks that are aimed at ensuring that the borrower pays as much money as possible. There is also another common mistake of borrowers – they pay the loan amount only, while forgetting to pay loan interest rate, so the credit history is getting worse. At the same time, most people believe that having a bad credit history is a reason for not borrowing money in credit institutions at all, as they can get a refusal. But in fact it is possible, just read an article to know how you can take money when your credit history isn’t ideal or how to improve it.
Bad credit history is the main reason for getting your loan application rejected. You can’t make your credit history ideal instantly, but there is a great and easy way to improve it. If your credit history is really ruined and you are denied loans, there’s a special solution for you. The process is simple – you consistently take and pay off several loans on time, thus improving your credit rating.
But why do you have to take a loan at MFI (microfinance institutions) exactly? Can’t you just get a loan from a bank? Banks are unlikely to be ready to give you a loan with a bad credit history, while MFIs treat their customers more loyally and approve most of the loan applications. Loan interest rate is usually higher compared to bank credits, but loan providers often offer special programs not only to improve the credit score but also to lend you money on special conditions and without interest rate at all.
It’s only three steps to a good credit history! You need to get a small loan from any MFI that suits you, and you need to repay carefully and on time. Remember that the first loan for new customers is usually at 0% interest rate – that`s a policy of many organizations.
After successful repayment of the first loan, you can borrow a larger amount and for a longer term. You will need to repay it also carefully and on time. After the second loan you`ll get the next one with special conditions that will immediately become available to you: a large amount, a long term, a reduced interest rate. Such a loan is taken into account in the credit history bureau already as a consumer credit. After successful repayment of this loan, your credit history will improve greatly.
Usually it is better to take loans for as long as possible: the more payments you make on time, the better your credit history will become.