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Sigismund Delfi sent screenshots showing that two large Lithuanian banks first took an interest in his Creditinfo credit rating on February 28, 2021. After that, the requests were repeated several more times.
It can also be seen that on March 24, Sigismund’s credit rating was Class C (medium confidence) and on April 1 it was lowered to D (low confidence). The probability that he would be late in settling accounts with creditors for 90 days or more was 10.12 percent.
The interviewee considered that it is possible that he has not received the loan due to the downgrading of his rating after resorting to several banks. However, the negative response he received was even when the grade reached C.
30-day quarantine introduced
Situations similar to Sigismund in public space were discussed a few years ago. Subsequently, the credit bureau Creditinfo announced that it had improved its credit rating calculation algorithm.
“The indicator of credit activity, which caused a lot of discussion last year, will be recorded for 30 days, but it will not be reflected in the credit rating,” the company announced in March 2019.
A press release explained that a client who chooses to check the interest rates of various banks in this way will not be able to worry that their credit rating may drop during this period due to increased activity at credit institutions.
“Credit activity is one of the four components of a credit rating. The other three are payment history, length of credit history, and financial data.
Each person’s credit rating consists of this set of four components, and although the credit activity factor is not more important than the others, it affects the rating calculated by Creditinfo. Credit institutions take into account the credit rating calculated by Creditinfo, but do not follow it when making decisions about the terms of the loans, ”the report says.
Creditinfo’s lawyer Anatolijus Kisielis later noted that the rating calculation algorithm had been improved taking into account world best practices and summarizing consultations with the Bank of Lithuania and clients.
“I believe that the solution is convenient and does not change the basic principles of credit calculation, which are based on research. Our message is simple: buying from credit institutions is completely safe for a month, but there is no need to relax: Credit activity has not disappeared from the credit rating calculation algorithm, because that would be wrong.
The system will simply not evaluate this indicator exactly 30 days after the first request. It will then retrospectively assess the frequency of appeals to banks and other lending institutions and adjust the rating accordingly. So if your banking inquiries last more than 30 days, your credit rating is likely to be lower in the second month, ”he said.
Do not lose hope
Sigismund said it received a negative response from the first bank in mid-March. He then commissioned a report from Creditinfo and saw its Class C rating.
On April 1 (that is, exactly 30 days after the first bank inquiries), the man received a message that his rating had been downgraded to Class D.
“There are other loans, but no space. It is not that I do not have the opportunity to pay,” he said.
Sigismund said he had already applied for help at another bank and hoped it would agree to make a loan for the chosen house.
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