Credit certainly invigorates the economy and is an ally in achieving our goals. Today, credit need for almost everything: applying for a new job, opening a bank account, buying, and even renting a property. A good credit score can mean the difference between being rejected or approved on a credit application or receiving a high or low-interest rate on your loan.
With the advice that we offer you here, we want to help you make the best decisions.
The score of credit is, according to APC Intelidat (first and only bureau credit information in Panama since 1957), a numerical value that summarizes all the information richness of your credit history and is used as a prognostic payment for credit. Its range goes from 70 to 965 and the higher your score, the greater the probability of fulfilling your commitments. This is why many institutions use this criterion when granting a loan.
What variables are considered for its calculation:
Multiple objective variables related to your credit history intervene to calculate the “score”. Next, we explain some of the most relevant.
- Payment history. It refers to the timeliness of your payments over the years. Since this variable is the one with the highest weight or weight. If you do not pay your commitments on time, your score may decrease up to 100 points.
- Amount of debt. It has to do with the level of indebtedness and the use you give to credit. That is, the amount of borrowed money you use vs. approved credit limits.
- Variety of credit. It is about the number and mix of credit accounts you maintain (mortgage, car loan, personal loan, credit cards) and the institutions you turn to when borrowing (bank or financial).
Easy to implement strategies to improve your score:
- Check your credit references regularly to verify their optimal status and dispute any incorrect information that may affect your history. APC Intelidat has a very affordable mobile application that allows you to have your credit references at hand.
- Automate your online banking payments. If you have a very busy schedule and it is difficult for you to get out of work to pay for your commitments. You should do it as soon as possible. There are no excuses, so you will always pay on time.
- Do not acquire new debts. Cancel or consolidate current commitments, so that you reduce your level of indebtedness.
- Keep your credit card balance below 30% of the authorized limit.
- If you don’t have credit references yet, apply for a credit card, but don’t use it. Pay your charges monthly until you establish a credit history. If you still can’t access it, ask for it guaranteed with your own money. Just include a recurring charge like your monthly cell phone bill and pay it automatically for online banking. This is why many institutions use this criterion when granting a loan.
Put these simple tips into practice and you will see the positive change that you will be able to achieve in a few months. Remember, use credit responsibly and doors will open to you with thousands of possibilities.