Poles are now buying a record number of flats – still, many people are overwhelmed by their low creditworthiness. How can we increase it to finally buy a dream apartment?
The most important factor that determines to whom the Polish bank is willing to grant a loan is, of course, the income of the person requesting the loan and their regularity. Polish banks also pay attention to the type of contract we have concluded with the employer (the best employment contract is for an indefinite period) and seniority. Continuity of employment is also important – longer breaks between successive periods of employment mean the risk of customer insolvency for the bank.
The creditworthiness is also affected by financial liabilities. All repayment credits and loans reduce the chance that the bank will grant the applicant money. Similarly, too high average monthly expenses, guaranteeing someone’s credit, and holding credit cards and debit cards. Importantly, the latter reduce our creditworthiness even when we do not use them.
The bank’s assessment of the borrower is also important for its age, marital status, number of dependents and its current credit history. Its lack is just as bad as bad credit history – in both cases the bank will be less willing to entrust us with money. What matters also is how many applications for a loan a person made – too frequent attempts to borrow money is a signal to the bank that the financial situation of the applicant is not stable.
Finally, creditworthiness is influenced by factors such as the loan amount requested, the type and number of installments, the repayment period, the amount of own contribution and the value of the purchased real estate help the bank to determine how high the risk is that the person will have a problem with the repayment of the liability. If it is too big, the mortgage will not be granted to us.
The basic way to increase your creditworthiness is to increase your income. If in the current job we do not have a chance to raise in the near future, we still have to find additional employment or change jobs. Importantly, the bank does not take into account one-off bonuses or cash prizes when calculating the creditworthiness – this must be permanent, regular additional income. They must of course also come from a legal source.
Another way is to reduce our obligations. It is best to pay off other loans taken and close all credit cards and debit accounts before applying for a loan. In the event of problems with repayment of loans, consider solutions such as refinancing loans and consolidation loans – their application will positively affect our creditworthiness. It will also be a good idea to limit the monthly expenses in the household. At saving, however, it must be remembered that the bank takes into account our spending and income from the last 6 months with creditworthiness.
The assessment of our creditworthiness can finally be improved by renegotiating the terms of the loan taken. The easiest way to convince a bank is to increase the number of borrowers. If we apply for money together with the spouse, parents or in-laws, the bank will take into account the income and liabilities of all applicants in the calculation of creditworthiness. We can also agree to extend the repayment period and replace the declining installments permanently – all this increases the chance of getting a loan.
The last method to increase your creditworthiness is to improve your credit history. Of course, it is not legally possible to delete records of late or unpaid installments from the Credit Information Bureau database. However, you can take out a few small loans (eg for a car or electronic equipment) and pay them back on time. Taking out a mortgage will move away at the time, however, when we submit a request, our latest history at BIK will look much better.
Let’s also remember to make sure that our data in BIK is in line with the actual state. From time to time, it happens that the bank forgets to send information to BIK that we have completed the repayment of the obligation. As a result, the credit still appears on our account as unpaid. If we are in this situation, we should inform the bank where the loan was repaid. When bank employees send a correction to BIK, the erroneous history will be corrected and our creditworthiness will increase.
Finally, it is worth mentioning one more, somewhat unusual situation. If what prevents the bank from granting us a loan is bad credit history of the spouse, the solution may be to establish the separation of property. If we decide to do so, the bank will only take into account our income and expenses as well as our repayment history when assessing creditworthiness. This simple step can help when buying a flat for many people who have not been able to get a loan so far.