Menu

Increase your credit? This is how the banks see it

0 Comment

You have taken out a loan, but the sum is not enough?

Simply asking for a higher loan in such a case is not a good idea. Because the banks evaluate it unfortunately as a clear signal, if shortly after the payment of a loan of new financing needs arises.

Reliability is a great asset for the banks. They want customers who are “predictable” in the best sense and who have their finances under control. Loans can be an important part of personal finance – as long as everything goes according to plan in connection with the loan. The most important thing is of course the reliable and punctual payment of the installments. But for the bank, it is also significant that the loan amount once taken is sufficient.

Half a year “wait” after the loan payment

Reserve directly with reserve

Of course nobody knows what will happen in two or three years. But you should be able to survey a period of two or three months. For the banks, at least in the first six months after borrowing, re-financing is usually not approved. Then the chances are better again – assuming, of course, there were no problems with the installment payments.

And that’s the good news: anyone who has been servicing their credit regularly for a year or more is increasingly rated positively by the banks. Each properly repaid loan directly improves the individual credit rating .

After all, there is no better proof that you are an honest repeller. And then it is not a problem if, for example, another loan is needed one, two or three years after the loan has been paid. The old loan does not have to be fully repaid in order to realize an increase.

Plan generously

“Less is more”, this old saying is justified in many areas of life. However, when it comes to the “right” loan amount, it can be a costly mistake. For a loan, sometimes it’s better to think and plan bigger.

How small or big the credit you need depends on several factors. If there is a major purchase and you need, for example, new furniture or another car, then the purchase price determines the required loan amount. If you want to replace old loans or balance your account, the required amount is also fixed quickly.

After having roughly determined their financial needs, many consumers now make a mistake. Immediately need 3,500 euros, then apply for a loan in exactly this amount. If the financial need is twice as high, they ask the bank for 7,000 euros.

Why is this a mistake? Quite simply: In such a case, the loan amount from the first to the last penny is completely planned. Although you will then achieve your goal (financing the acquisition, account balance, debt restructuring), but you have no leeway beyond.

What do you do if you suddenly need money again shortly after borrowing? If you go back to the bank then you will most likely receive a cancellation. Renewed need for finance shortly after receiving a loan is an extremely negative signal for the banks. The result: You can neither increase your credit nor receive additional financing. So often there is nothing left but to take (again) the extremely expensive credit line.

Reserve directly with reserve

If, on the other hand, you apply for 4,500 euros instead of the 3,500 euros actually required, and instead of 7,000 euros you prefer 8,000 euros, then the bank usually has nothing against it. It is much easier to immediately realize a higher amount of funding than later to ask for an “increase”.

Even if you do not really need the extra $ 1,000, this reserve on the account makes you feel good – and most of all, you’ll be prepared for sudden unexpected expenses.

Especially in times of low interest rates, it makes sense to calculate the loan amount rather more generous.

Conclusion: The credit total rather always calculate something generous, so that the money is not short even with unexpected expenses. And then, with regular payment of installments, build trust in the banks bit by bit. Then there is a promise very soon, when the next time a loan is needed.