When asking for credit, many questions arise. The problem is when the urgency is high and the supply too easy. Many people fall into blows or curl up even more. There’s no way. Often the way out of one debt is to another. Or those desires that depend on money, such as buying a car, home, etc.
If you want to fulfill some wish, get rid of debt or other circumstances that involves money, here are some tips to get smart when applying for credit. Involving money, every care is valuable. It can help a lot, but it also ends up disrupting your financial life.
Care needed when applying for credit
The first step is not to go after the money. It is recommended that you decide things calmly and evaluate the best conditions. Without planning, you may curl up ahead.
So here are some tips as a direction for you to be able to borrow in the best way that will not negatively affect your budget.
Can your need wait?
How urgent is it to have the good or benefit you expect from the loan? If he can wait, it’s better. When you pay cash, it avoids that lot of interest and still doesn’t drag that debt forward. You can start personal or family planning. Gradually, you can put your financial life in place, save money, and have the money to fulfill your wish in the beginning.
That’s why this time is so important, to think. If you can leave it later, possibly with a little control and discipline, you organize things, pay cash, and don’t commit your budget for months to come.
Evaluate selling a good
If your debt has gone overboard, your rent is late, or any other reason you need money soon, one way is to evaluate the sale of your valuable property. Your car, for example, can be sold to pay the bills or settle the rent. If you have money left, invest in a simpler model. Unfortunately, if you have reached this situation, it may have been caused by a lack of financial organization or some unexpected problem.
But it’s always good to keep calm at these times. Here’s what is most important to you: Pay what you owe or keep the car or other valuable asset. Keep this advice in mind: In times of crisis, you need to think and act differently. Some habits will surely change until everything begins to return to normal.
Search for the best credit alternative
There are several types of credits available in addition to places. Banks, financiers and even people offering easy credit. This may confuse you, but the easier it gets, the more expensive it can get. It is recommended that you look for trusted institutions. The bank you have a relationship with can be a good start. They already have a background of your financial history and know what they can offer you. When applying for credit, consider what may be best for you and whether it is the cheapest alternative you are willing to pay. Faster credit may not be the best investment for you.
You can gather various types of budgets and plans at other banks. If any are better than your bank’s, talk to the manager and see if there is any possibility of covering the competitor’s offer.
Swap the most expensive debt for the cheaper one
Within your credit rating, be sure to be aware of what you already pay. Did you know that there are often alternatives that lower the amount paid to a debt? If you have credit card debt or overdraft, you can simulate, for example, a loan. You exchange the original debt for the loan, which may have lower interest rates than you already pay.
Before applying for credit as a vehicle loan, consider financing. It can be more affordable most of the time. But don’t forget, make this simulation in several banks. Right off the bat it may seem like a good deal but be sure of it!
Pay attention to CET when applying for credit
This type of error is very common when asking for credit from the bank. Not paying attention to CET (Total Effective Cost) can lead you to a loan that is not a good deal. CET involves all the fees and charges you pay for the loan. That is, it is the amount you will get paid in the end. In some cases, the debt doubles, and therein lies the danger.
In addition to splitting in many times, you may have spent more than you planned or could afford. Imagine that you buy a car and that at the end of the installment payment, would it take two? It’s very frustrating, isn’t it? It is therefore important to evaluate and understand if it is better to pay a little more even without having the money.
Always be aware of the contract
Let the laziness to read the contract aside. It can be huge, but it basically brings out all the details that can change your financial life for a while. In the contract (whether loan, financing or other credit product) it is possible to find possible fines, late penalties and other adverse conditions. It is also important to pay attention to special clauses if the bank covers, delays or other circumstances in which the contract may be revised or even canceled.
Take time to read before signing and writing down key points or requirements. If any questions arise, do not hesitate and ask the manager.
Beware of time
When applying for a loan, be careful about the time you want to make the installments. Usually, the longer, the more expensive and the more interest you pay. Before closing the deal, you know how your financial life is. Remember that now you will have one more debt added to the others. Evaluate if this is possible at this time. Run several simulations involving longer and shorter payout times. Who knows, you might pay a higher amount in less installments, which result in lower interest and close to the original amount.
Ask yourself these three questions before asking for credit.
Still wondering how much to apply for credit and end up tangled up? If still uncertainty is prowling your thoughts, you can classify your need with three simple questions:
- I really want this well?
- Need the good?
- Can I afford the debt?
Wanting is different from needing. If you really want a good or a benefit, you may just as badly need it. But if you want and need it, consider whether you can afford a new debt right now. We always hit that same key here. The benefit may come, but it does not make up for the financial suffocation you end up with. Money is missing every month, you live tight and nothing gets better. Wait a little bit more. Start your financial planning now and be well placed to start pursuing your goals. It may sound like economist talk, but trust that: organization makes a lot of difference once you start.
Why am I denied when applying for credit?
In a country with more than 60 million negatives, it is not difficult to find reports of people who were denied when asking for credit. For many situations this can happen to you. As soon as someone applies for credit (card, loan, financing, etc.), the lender begins an analysis of that person. There are several factors and each may vary the requirements. If it is coming that you can afford the benefits, the credit will be released. Otherwise, if the bank has any reason to feel threatened, the person is denied.
For those who have the dirty name, getting approval is much more difficult. Because right away the financial institution knows that the person may not be able to repay the debt. There are even financial products for negatives. The problem is that interest rates are usually much higher than normal, which can turn into a much larger snowball. Another well-known factor of non-approval is the credit score. It is a style of punctuation that every consumer has. And a low score does not mean you are negative.
How does the score work?
Each person has a “grid” type as a consumer. It goes from 0 to 1000, where:
- 0 to 300 – high risk of default;
- 300 to 700 – medium risk of default;
- Over 700 – low default risk
With several factors your score is generated by companies such as Serasa, proScore, SPC, etc.
Accounts paid, overdue, if it was negative, credit applications, relationship with credit institutions… everything is included in this data. This information is passed on to agencies through stores you normally purchase, as well as banks themselves to those agencies. So maintaining good relationship with the lender is very important always.
What lowers my score?
- Overdue Debts
- Financial history (unpaid accounts, negative)
- Delay payment of bills, invoices, etc.
- Apply for multiple credit cards
- Apply for multiple loans
- Request limit raise overstate
- Do not have accounts in your name
What makes your score increase?
- Pay bills on time!
- Have accounts in your name
- Update your data
- Beware of credit request frequency
- Negotiate Debts
- Positive Registration
How to consult my score?
You can check your score for free at credit protection sites like Serasa, ProScore and SCPC. Perform a quick registration with your date and wait a few seconds or follow the instructions of the portal. Remembering that, some people can’t get a score. This is because most of the time, the consumer has nothing in their name that can generate information such as accounts or credit card.
Did you like to know how credit application works? Leave your comment at the bottom of the page! See you later.