06.10.2022

GETTING A FAST LOAN WITH A BAD CCR

Behind the abbreviation CCR stands the so-called Central Credit Register - an information system maintained by the Bulgarian National Bank. It contains up-to-date information on all active loans granted by banks, non-bank institutions, electronic money companies and payment institutions.

The Central Credit Register stores the credit history of all people who have taken out loans from registered institutions, and all companies consult it before granting a loan. In this way, credit institutions understand whether their customers have provided reliable information about what loans they have and whether they have regularly covered them in the past.

The credit register stores data on all current and past credits going back 5 years, and if during that time the client has delayed payments or has not met his obligations at all, he has a bad CCR. The number of late installment payments is also noted. When checking a person, his credits are divided into 4 groups - regular, under supervision (overdue between 30-90 days), non-serviced (90-180 days) and lost (over 180 days).

The statute of limitations of the Central Credit Register means that if you had credit delays more than 5 years ago, this will not be reflected in the reference to the credit institutions. However, if you've had a more recent slowdown, there's nothing you can do to cover it up. On the other hand, you can be consistent in your subsequent payments, which will show that you are responsible for your loans.

Bank loan with bad credit history

The chances of getting approved for a bank loan are lower than those of customers with a good CCR, but it is still not impossible to get a loan. The terms in this case may be slightly different, such as a higher interest rate or some additional fees. Not only non-bank institutions, but also some banks allow many people to take out quick loans, but for each of them the contract may have different conditions.

Anyone can fall behind on monthly payments. There are a variety of reasons for this - job loss, unforeseen expenses, etc. That is why some banking institutions have a policy of giving loans to people with a bad credit score. It takes into account when the delays occurred, the number of installments that were delayed, and what the circumstances were.

Even if you do not have a good credit history, it is very likely that you will be granted a loan from several banking institutions, and each application is strictly individual and depends on many things.

Getting a quick loan with a bad CCR

Scoring a credit history as "bad" is somewhat subjective and can vary between lenders. However, it is clear that if you have a lot of bad debts or have lawsuits filed against you, it is unlikely that any bank will be inclined to lend to you.

Non-bank financial institutions, on the other hand, are more flexible in their judgment and it is possible to be approved for a loan even with more serious shortcomings. These loans are given for a shorter period and have a higher interest rate. This makes them highly liquid and suitable even for customers with a bad credit history.

Emergency loans are used to cover an urgent need for funds. Usually, the amounts can be received within the day, and with some online options – up to a few minutes. Many emergency loans for smaller amounts are granted immediately and only against an ID card. Viewing and digesting is extremely fast.

One way to get a bigger loan despite your bad credit score is to provide some sort of collateral for it. This can be a property, a car or a guarantor whose credit history is acceptable.

Decent fast loan companies do not deliberately aim to worsen the financial situation of customers who are too "stuck". When a creditor considers that granting a loan will harm the person more than it will help, it responds to the application with a refusal.

Fast credit in the absence of an employment contract

Banks usually require the existence of an employment contract in order to guarantee the return of the loan amount. However, this restricts people who do not work on an employment contract, even if they have other income. In this way, quite a few customers end up excluded from the target group and fail to get a loan.

Income from maternity, pension, rent and even a temporary employment contract probably won't help you take advantage of the credits with the requirement of a permanent employment contract. Although these revenues are stable, banks rarely compromise on the document requirement.

A large number of fast loan companies are ready to provide credit without an employment contract for bad credit history, precisely because they accept the above for income. However, credit institutions can set some additional conditions – a higher interest rate, another type of guarantee, etc. Thus, almost everyone with a bad credit score and no employment contract can get financing, but under less favorable conditions.

How to improve your credit history?

Keep in mind that if most lenders deny you a loan based on your history, it's probably a bad idea to take out more loans, even if they do. This way you risk making the situation even worse and getting out of it even more difficult.

If credit is really your only alternative, apply only for the amount you need and don't ask for extra money on top. This is how you signal that you are responsible for your finances and that the bad CCR was the result of circumstances beyond your control. You will also protect yourself from high interest on a larger amount.

Don't even think about lying or hiding any of your data, no matter how bad your CCR is. No financial institution will grant you an emergency loan if they suspect that you are dishonest. It is to your advantage to always choose honesty over silence.

Even if you still have delinquent payments on your report, if it appears that you are now a regular payer, your chances of being re-credited are significantly higher.

In case you can't keep up with paying off your loans, don't take out new ones to pay them off. Instead, consider options for combining obligations or restructuring them, so that you have the opportunity with a smaller installment to gradually enter regularity.

Don't hide from the lenders - they also have an interest in helping you find a solution to the problem. Dialogue is beneficial for both parties, and the solution may be to change the repayment plan, move installments, etc. It is important that you take the initiative to have such a conversation and discuss a plan to deal with the situation.

It takes effort, such as paying twice a month or prioritizing payments and paying them off one at a time (if the lenders at the end of the queue are patient enough). A debt settlement decision should be a detailed plan of when, to whom, and what will be paid. Regular payments (even if incomplete) show creditors that a person is making an effort and usually delays debt collection actions.

If creditors are not ready to make concessions, and payment difficulties are expected to continue over time, then it makes sense to proceed with debt consolidation. This usually means taking out another loan to pay off your current loans. The bonus is that from this point on you will pay only one installment, which will be tailored to your current financial situation.

Steps to improve your credit score

- Pay your bills on time - in addition to all loans and credits, this column also includes rent, utilities, telephone bill, etc.;

- Pay off debt and keep credit card and other revolving credit balances low – lenders generally like to see a low credit utilization ratio (below 30%);

- Apply for and open new credit accounts only when necessary – unnecessary credit can hurt your credit score in many ways;

- Don't close unused credit cards – this is a smart strategy, as closing an account can increase your credit utilization ratio;

- Do not apply for too many new loans, simply because banking institutions consider you as a reliable borrower - even lenders can offer you new profitable loans, if you really do not need them, it is better not to accept them.