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Colombians have good payment habits. Even in the midst of the current economic crisis generated by the covid-19 pandemic, the vast majority of those who have debts with banks, telecommunications companies, public services and other firms that provide some type of financing, keep their obligations.
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The credit card is one of those priority debts of Colombians, because they know that this means of payment can always get them out of an emergency.
The debts of Colombians, only with the bank, exceed 526 billion pesos, of which 96.1 percent are up to date and only 3.9 percent – about 20 trillion pesos – are in arrears of more than 30 days, according to the Financial Superintendence.
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Although credit institutions and the government have implemented a series of supports so that debtors maintain these good habits of paying their obligations or, at least, avoid falling into default with their debts, It is important to understand how your rating operates in credit bureaus and how to improve it in times of crisis like the current one.
According to guidelines from Experian, the firm that manages Datacrédito in the country, a person’s credit score is a key factor in their financial life. This depends, to a large extent, not only on whether the entities grant you a loan or not, but the cost of that financing, because the more negative your rating, the more expensive a debt will be.
“This three-digit number is used by entities to measure the risk of granting credit. The higher the score, the more likely a person is to qualify for loans and credit cards on the most favorable terms, which will save money, “they add.
So Experian presents some recommendations on how to understand and improve that score:
1. Why is it important to know and understand your credit score?
A good understanding of these factors allows you to understand what changes you must make in relation to your financial obligations and improve them, if, for example, you have very low scores. Keep in mind that these adjustments take time to be reported by the financial entities with which you have products. That is why it is essential that you regularly monitor your credit rating, through tools such as midatacredito.com, where you will be able to know not only the score but the factors that may be affecting it.
2. How can I take care of my credit score?
The best way is to maintain strict financial discipline and this includes keeping up with your debts. Paying late negatively affects your credit scores. A good strategy for this is to use, for example, automatic debits and reminders to make the payment of your obligations. If you are currently delinquent on a payment, update it. Remember that the Habeas Data Law establishes that the term of permanence of negative data is less, if it is updated as soon as possible.
3. Does having multiple debts improve my credit rating?
No. Keep only those debts that you can pay off without much effort and open new loans only when necessary. Remember that unnecessary credit can hurt your credit score. So plan well when applying for a new loan, always take into account your ability to pay or your income.
4. Does taking the amount of my card or revolving credit affect my score?
Yes, as this indicates to financial entities that you are not careful managing your credits. Always keep your credit card and other revolving credit balances low. Credit utilization is another important factor in calculating your credit score.
5. How can I monitor my credit score?
A good credit score can help you get better interest rates. It is important to periodically check your credit report and your credit scores. SIf you do not currently have a credit history, this is likely to mean restricted access to obtaining credit. It is important to start building a credit ‘score’ from products and small debts to generate information about your payment habits.
6. How much does it cost to check my credit history?
In addition to the different channels that DataCrédito Experian has provided for holders to consult their credit history, Since March 2020 midatacredito.com gives Colombians the possibility to access their credit history electronically and for free.
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By: Economy and Business
