For you to be approved for a mortgage or personal loan, for example, curiously, you must have other credits. The behavior in paying debts is one of the main elements for them to grant you new credits.
In Mexico, the Credit Information Societies (SIC), such as the Credit Bureau or Credit Circle, are institutions in charge of preparing a credit history and summarizing that data in a credit score or rating.
The number of points you have in the Credit Bureau or Credit Circle is generated each month on a scale from 449 points to 775 points. The rating tells you if you are punctual in your payments and if you are in debt; In addition, it gives you a reference of how you are compared to the rest of the population.
Credit score, a credit bureau
If you want to be approved for a loan to buy a house with a low-interest rate, you must have a high rating. But how is your credit score calculated? There is not a specific formula, but a series of factors increase or decrease your credit score. Here we tell you what they are to improve or maintain a good rating.
Pay promptly without a doubt. Paying more than the minimum of your credits on time is a mandatory point to have a better rating. Of course, the last payments have a more significant impact on the credit score. For example, if a cost is missing in the previous month, this will be more relevant to your score.
Therefore, if you are ever late due to an oversight, catching up in 30 days can increase your score again. If you have a problem paying, you must contact your bank or financial institution to agree on a fixed or lower rate. Although institutions are the devil, they prefer that you pay them; It’s just a matter of communication to negotiate a little. Of course, don’t expect them to forgive you the debt either.
Level of indebtedness
Having a lot of debt is not a good idea to get a better credit rating—SICs award points for having a high level of credit but lower points according to debt. Suppose you have a lot of debt and are close to your credit limit. The probability that you will not pay the debt increases. On the contrary, if your debt is low, you may pay quickly.
Eye! If your debt is greater than 50% of your credit limit, they begin to deduct points.
Number of open credits
To avoid our credit line being at the top, we might think it is convenient to have several credit cards to add points. However, the SIC negatively qualifies several available credits even if you do not use them.
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Number of credit history inquiries
This point is controversial since it is harmful to check your credit history several times in six months for the SIC. This means that you are looking for another credit and will not be able to pay it. However, it is counterproductive to get a loan with better conditions.
So, if you want to change your creditor, you should be careful not to consult other options for at least six months.
Age of your credit history
The more information banks have about your financial behavior, and you maintain good habits in managing your credits, the more the bank or financial institution can trust you. Therefore, you will have a better grade.
Pay in cash
Paying for your purchases in cash can be positive for your finances so that you do not have any debt. However, this does not help improve your credit history or score; What the SICs measure is compliance with your monthly credits and not cash purchases.
Being a guarantor or joint debtor
If you are a guarantor or joint debtor of another person who does not pay their credits, then your rating will be affected, even if you pay your debts on time.
So, try to avoid being endorsed by relatives or acquaintances who probably won’t pay their debts.