5 Tips for Improving Your Credit History

When requesting a credit o one Financial servicethe first thing that financial institutions review (banks, financial cooperatives, etc.) the credit history of its customers.

According to figures from Report on the Credit Situation in Colombia of the Banco de la Repúblicato assess the income of New customerslos banks have focused on projected cash flow, while financing companies (44%) and the financial cooperatives (33%) mention the client’s credit history is the most important thing.

(‘We are left without debt, with capital and with a strategic partner’).

This is because the number of credit operations in Colombia is increasing. According to a recent study by the risk center Datecreditin court of March 2023, it went from 38.9 million loans in 2021 to 49 million in 2022, that is, an increase of 26.5%.

“It is important to keep in mind that maintaining a good credit score can open doors to various opportunities such as obtaining loans at preferential interest rates, accessing financing with a faster response than normal, or having the amount you need, regardless of whether it is much higher.“he mentioned Katherin Sánchez, director of credits at R5.

(Taxes to be paid in the second semester).

1. Be aware of debts before acquiring another financial service: If you took a loan recently, do not request other products in the short term, as it is better to stabilize the cash flow before getting into a new one that may hinder your ability to pay.

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2. If you have credit cards, be careful with your quota: It is key to have a good percentage of space available on credit cards, since consuming it all can take away your borrowing capacity, which can affect the request for some other financial product.

3. Plan your monthly budget by calculating income and fixed expenses: By calculating fixed income and expenses, a solid foundation can be established to manage resources effectively. Starting with income, it is important to consider all sources of regular income, such as wages, rent, or additional income. This will allow you to have a clear vision of how much money you have available to allocate to different categories of expenses.

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4. Pay your obligations on time: Be sure to meet established payment deadlines and avoid late or partial payments. In the event that you cannot meet your obligation, contact the entity that made the loan and reach a payment agreement in which both parties achieve the objective of fulfilling the obligation.

5. Do not get into long-term debt: By opting for the fewest number of installments possible, you avoid paying more interest and accumulating excessive debt that can negatively affect your finances in the long term. In addition, it is important to carefully evaluate interest and fees associated with fees to make informed financial decisions.

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