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What is a credit score?

This is a numerical figure that represents how much of a good payer you are. Obviously, the higher your credit score, the more likely you’ll get approved for a credit card, a loan, or other financial and investment vehicles.

How to compute for credit score?

You don’t really get to compute for your credit score. But you will definitely have an idea of your current score because this all depends on your credit history. Your credit history includes how many bank accounts are opened and are being utilized, if you’re paying your bills on time. if you’re paying loans at all, if you have any foreclosed property, or if you’re employed.

Credit score in the Philippines

Unlike the United States and some other countries, here in the Philippines we don’t have a centralized credit reporting. However, what is available for us Filipinos is the Credit Information Corporation. This is the company that handles credit scoring. However, local banks and other financial institutions can still determine your credit rating through letting you fill out customer information forms or have someone conduct a simple review or investigation.

How to build/improve credit score

Building or improving your credit score is simple if you keep in mind the following:

  • Avoid late or missed payments: The fact that you cannot pay your bills on time speaks a lot of what kind of borrower you will be. If you avoid paying bills, lenders will avoid you, too.
  • Don’t go over your credit limit: The credit limit exists for a reason because that’s the maximum amount that the banks think you can pay at a certain period. So for your sake, just don’t do it. 
  • Lower your debt-credit ratio: Do not go into debt without having enough funds to pay for it. It sounds pretty ironic but taking out a loan is not free cash. So you must be responsible in paying back the money you owe by making sure you will have enough for it and for your daily needs.
  • Stay employed: No work means no source of income means less chances of getting approved for alone. Aside from staying employed, try working your way up the corporate ladder or at least stay for a while. Trust me,.it will look good for credit.
  • Stop requesting for too much credit: Even if you apply from several banks, that doesn’t mean they wouldn’t figure that out. Banks do communicate with each other and if they find out that you’re attempting to apply for multiple loans at the same time, there goes you’re chances of getting approved.
  • Maintain a good relationship with your bank: Most lenders approve loan or credit card applications from existing clients. This means you have already established a good relationship either via savings or other investment vehicles with your bank.

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