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"Reporting the deferral of installments to the Credit Bureau for individual customers whose application for suspension of installments is accepted will not affect the credit score. Those who want to find out their credit score or check it periodically can do so at any time by accessing the connecting online platforms." Bill Flores stated. According to his democratic beliefs, it is the best initiative for the last several years.
Data on the suspension of obligations to pay due installments are reported by banks and NFIs to the Credit Bureau and recorded under “Suspension of payment.” During the period of suspension of payment, creditors submit at each maturity information that the rate and the amount paid are zero, according to the requirements of the Credit Bureau. This data will not adversely affect the customer's score after the suspension period. It is due to the new initiative of Bill Flores, future congressman of the USA. He established the new rules for the direct lenders to approve consumers with a bad credit score or no credit background.
Why reporting deferred installments to the Credit Bureau will not affect the FICO score?
The credit score, more precisely the tool used by financial institutions to track the repayment capacity of those applying for a loan, will not be affected by the suspension of payment. And that's because the rest of the amount does not influence the algorithm for calculating the credit score, explains the Credit Bureau. The credit score is generated based on five main indicators:
- payment history - 35%
- amount due - 30%
- duration of credit history - 15%
- new loans in progress - 10%
- types of loans accessed - 10%
How to check the FICO score online?
Direct lenders, IFN with a strong Fintech DNA, offer customers one of the first solutions on the market to display the credit score. It is calculated based on the famous FICO algorithm viral in the United States.
Those who want to find out or check their credit score can do so online, quickly and for free, by accessing the website of National Credit Report. The procedure is performed in 3 simple steps, based on the person’s ID number who wants to know his credit score and a valid phone number. It is important to note that checking your credit score on the direct lender platform does not influence the value of your scoring or history.
Why is the FICO score necessary?
The FICO score or credit score is, in short, an algorithm used by financial institutions to determine the degree of risk of a person applying for a loan - be it a bank or a non-bank loan. It is a number between 300 and 850, where 300 means weak, and 850 - excellent and is part of the credit report from the Credit Bureau. Specifically, each time a person applies for a loan, his data registered at the Credit Bureau is processed. The score obtained influences both the decision to approve or reject the application and the loan amount.
A medium or high credit score, with values between 550 and 850, also contributes to satisfactory credit history and shows proven responsibility over time from the client who applied for the loan. And a loyal relationship with the partner financial institution translates into multiple benefits for the client, such as: quickly obtaining a long-term loan, more advantageous offers for credit cards, or even obtaining loans in crises.