Life without the credit is almost unimaginable today, and many do not even know that they are living on credit when they are running low on their current account or when buying on credit cards. The word credit is often used in everyday life without being understood by many. It comes from the Latin word credo which means belief, that is, trust. When we take out a loan, we use someone else’s money with the promise that we will repay it within a certain time, so the essence of the credit relationship is trust between the two parties – the one who lends and the one who is the loan beneficiary.
It is important to be well informed about the details of individual loan products when you plan to take them. It is the same with marriage; Although credit is not for all time, those who know well what they have promised and to whom they have promised are doing much better.
If you are just getting acquainted with a loan
It is important to understand that it has a significant impact on your financial situation for the duration. It doesn’t have to be a complex loan like a home loan; because both minus current account or credit cards have a major financial and psychological impact on your home budget.
Also, irresponsible behavior towards financial products and services such as over-indebtedness, overdraft, late payment of loan repayments, etc., destroys your financial reputation by which many institutions evaluate the conditions under which they will agree to lend you money or cede the rights to use certain services.
Individuals with a good credit profile often get much better conditions that are not available in the market because an institution may trust them more to fulfill the obligations they have agreed to. Because of this, think carefully about whether you pay your financial obligations regularly and build a good financial image – it will ultimately pay off!
The two most important tips for beginners in the credit world are to create the image of a good bank customer and to manage their personal finances responsibly.
Create the image of a good bank customer
Very often, tidy payers and solvent individuals get much better credit conditions because of the good image they have created. Just like any other image, the one of a good client is not created overnight but is the result of how you manage your money, which is evident in the banks and financial institutions with which you do business.
When you open an account, it is important that you know all about the financial services you are using and that you are not taking on those you are unfamiliar with and who do not know how they work – which may cause you problems (such as using the minus margin).
In granting a loan, the bank will, with your consent, verify your financial obligations and creditworthiness, and will then decide whether you are able to settle the obligations to which you will agree. Because of all this, it is important how you manage your financial situation.
Manage your financial situation
Spend only today as much as you can afford, or only as much as you can pay at the end of the month when your bills arrive. Paying all the bills regularly within the due date is a responsible behavior towards money that shows your attitude towards your financial obligations.
This is also true when taking out a loan – assume only the credit obligation that you will be able to settle on a regular basis if your financial situation worsens. Otherwise, you will find yourself in difficulty.