Currently, apart from commercial banks, there are also many non-bank companies that grant loans. However, banks and private companies have one common requirement: credit history. In many cases, even people with no regular income get a loan, but if someone has no creditworthiness, they can forget about the loan in the bank, and even more and more loan companies will reject their application. The larger the loan or the higher the loan amount, the greater the requirements towards the client from the lending institution. Therefore, before applying for a loan or a loan, it is a good idea to first check that you are in the condition of having a good credit history to make sure that it is not rejected for any reason.
How can you check your credit history?
In Poland, the institution that collects information on individual loans granted to consumers is BIK, i.e. the Credit Information Bureau, but in the results recorded on the account in BIK there are also more and more loans taken in payday loans or credit unions. BIK automatically receives information from the bank or the lending company cooperating with: credit or loan applications submitted, loans and credits taken within the last 5 years and the repayment history itself, i.e. whether the installments were paid on time, whether there are no delays or no delays repayments etc. Data are updated up to a maximum of 7 days from the occurrence of the event, e.g. taking a loan and entering an active liability or its total repayment. In addition, there is no minimum amount threshold, which means that it does not matter whether we took a loan in the amount of PLN 100 or 100 thousand and it will be entered in the BIK. Such data in BIK is stored for 5 years. Thanks to this, the lender can check the credit history of a potential client for the last half decade, which says a lot about a man who wants to borrow money.
It is worth knowing that not only banks or parabanks can have access to the database of the Credit Information Bureau. The customer can also check his credit history. It is extremely simple and can be free. BIK provides three types of packages to individual clients: Trial report for PLN 0, Package of 12 full reports for PLN 79 a year and Single report for PLN 36. However, the free report does not contain information on scoring or repayment history, so in practice only personal data will be included. If you are interested in insight into your full credit history, it is best to choose a single report that does not cost much, and the information it contains will be very valuable.
Once you decide on one of the report options, you simply have to create a user account on the BIK website. It is worth checking, however, whether it is definitely the official website of the Credit Information Bureau. Of course, you need to verify your identity by sending an ID card scan. After about 15 minutes, the verification will be done and we will be able to download the selected type of report.
What exactly is included in the BIK report?
The most specific report, unfortunately, costs, so you may be asked if you really need it. People who have ever taken loans and repaid them on time definitely want to know how the bank will evaluate them the next time, and for this you need to know the scoring that BIK calculates. Scoring is a benchmark of how credible and reliable the customer is. The higher the better for us. If we are going to apply for a large loan, for example a mortgage, this could be the key message. However, if you are interested in taking a payday loan, all you need to know is whether all our obligations have the appropriate reference number. Unfortunately, in BIK there are mistakes and, for example, marking already paid liabilities as still active.
Thanks to the fact that in BIK information is stored for 5 years, you can check your entire credit history for the last 5 years, which for many people means – from the first loan taken. Only commitments that we agreed to when submitting the application will be entered in the BIK report. First of all, the report contains information about open credit accounts, i.e. currently repaid loans and non-bank loans. The amount of the liability is also given, and within 7 days of repayment of the installment or the whole its value is updated. It is also noted whether the installments are repaid within the prescribed period. If we only submitted the application but it was rejected or we withdrew our commitment, it will also be recorded.
What will good BIK give us financially?
Many people may wonder why bother at all and build a good credit history. In addition to the fact that we will get a loan at all, the advantage is another: lower loan costs. Although it seems impossible, because the banks count ratios and points themselves, and BIK scoring is only an indicator for clients, it can, however, be information whether it is worth negotiating a lower margin with the bank or whether it is possible to count on better conditions than the average bank client He receives.
It is estimated that with a very good credit history you can count on a margin of 0.3% lower than with average BIK. It would seem that 0.3 percent is very little, but if it is a mortgage, we will save up to tens of thousands of zlotys.
Numerical example: Suppose a bank customer wants to take a PLN 400,000 mortgage for a repayment period of 35 years. The standard total interest on the loan is 5.74%. And a customer with a very good BIK receives an interest rate of 5.44%. So it turns out that a standard bank client will pay a total of PLN 928 767, and a person with a very good BIK only PLN 895 591, 20 PLN. This saves up to PLN 33,175,80. Little? For this amount, you can renovate the flat you bought and buy furniture for it.
How to build a credit history?
It is worth noting that building a credit history makes sense when you want to take a large bank loan. Non-bank loans via the Internet will most likely not even check BIK, and even if their costs are not negotiable anyway. Just check the payday rankings to see that the costs are fixed for everyone, and only new customers can count on a free first loan. However, if you are interested in a bank loan, you need to build creditworthiness as soon as possible.
Even one entry with an active and regularly repaid loan is better than none. Since all liabilities, regardless of the amount, are entered into the BIK, it can even be a installment loan for a dryer worth PLN 100, and that will count. If someone has no entry then the bank simply does not know what this customer is and what to expect from him. You can also build a credit history by using a debit or revolving loan on your account, or by having a credit card and paying it off regularly. Many people also take electronics / household appliances in 0% installments in electronics stores to have entries in BIK. This is a good way to quickly take on several obligations that are easy to repay and thus add points to scoring.
Where do they check BIK?
However, there are also people who already have bad BIK and do not know what to do with it, and need money quickly. Although some loan companies check BIK, you can still find loans without BIK and loans that even people with a negative credit history will grant. Unlike commercial banks for a loan company, one negative entry is not a reason to reject the application. Unfortunately, banks obligatorily check BIK and I have to reject such applications even if the case concerned a loan for the dryer for PLN 100. In loan companies or even in credit unions, customers are approached more individually, and often it is the income and low cost of living that make it possible to save money on paying an installment, rather than whether anyone has ever taken a loan or credit from a bank. In this respect, payday loans are more accessible to people because the applications are considered by employees of the company and not analyzed by the financial algorithm created for banks.
But online payday loans have other advantages that they don’t check BIK. Yes, most loan companies have no access to BIK, they have BIG Info Monitor, but it is not problematic. The payday loans issue a response to an application even in 15 minutes, and therefore even people who have creditworthiness and good BIK can use them when they need money quickly. Loan companies operate so quickly because they are based on a statement made by a potential customer and verification via an application or bank account to confirm personal data. After receiving information about the processing of the application, you can expect the loan to be paid out in the next 15 minutes. Which closes the whole procedure in half an hour. Unfortunately, in this respect, banks have no chance with payday loans.