Succeed with Us – Part 2

Part 2 – The case in the village of Lozarevo

With today’s “Succeed with us” article (part one can be found
) we will briefly tell you the story of the Stoyanov family from the village of. Although they were caught in the financial whirlpool of debts, they successfully cleaned up their credit history and took control of their financial situation.

In April 2022, Ms Stoyanova applied online for a loan with us, and her desired amount was 20 000 BGN. Mrs. Stoyanova and her husband are the owners of an old two-storey house in the village of Lozarevo, Sungurlare municipality, which house also constituted the collateral they offered under the loan agreement.

The Stoyanov family urgently needed cash to refinance their debts to other creditors and to renovate their family home. Mr Stoyanov had 6 active loans with a balance of about 7 500 BGN, most of these loans were in arrears – more than 360 days. Mrs Stoyanova, on the other hand, had 8 loans with a balance of BGN 6 000, half of which were regular and the other half 180 days overdue. They both had a working income of the minimum wage.

The deteriorated credit history of the Stoyanovi family was an obstacle to obtain the desired amount on favorable terms, as most banks directly rejected their application. Despite their worsening financial situation, the team of Light Finance managed to offer them a favorable offer that met their capabilities and individual needs.

In less than a month, our team was able to arrange the signing of the loan agreement and the successful refinancing of the Stoyanov family’s arrears to their other lenders.

Today, with a smile on their face, the Stoyanov family can proudly state that they have not had a single overdue payment, their credit history is clean, which in turn has opened up the possibility of receiving additional funds from the bank and securing the dream renovation of their family home.

Having briefly introduced you to the story of the Stoyanov family, we will try to be as helpful as possible by explaining what exactly constitutes a bad credit history and what are the options that lie ahead of you to clean up your credit record.


What is a credit history?

A credit history is a named record that is created the moment you take out credit for the first time. This file is kept in the central credit register maintained by the Bulgarian National Bank. If your monthly instalments are overdue, the creditor sends information to the central credit register that the debt in question is not being serviced by the debtor in a timely manner. Your credit history is an important component in the formation of our credit score, which also gives every lender that all-important assessment of your creditworthiness. Having delinquencies on your credit record alerts lenders to your higher credit risk and therefore reduces your chances of approval.


How and where can you check your credit history?

Verification of debts to banks and financial institutions is carried out in the credit registry, and you can check the CCR in person or by submitting request online.

  • On site (in person)

If you wish to obtain information about your credit record in person, you need to submit an application to BNB. Everyone is entitled to one free reference per year. Any subsequent reference or express request will incur an additional charge.

  • Online credit register

You can do check your credit history online, which will save you a lot of time. For this purpose you need to have electronic signature.


How to clear your bad credit history?

Clearing your credit file is a challenging task that takes  a lot of time, so we advise you to think carefully in advance about how much of your monthly salary you can spend on repaying the loan you have. In case you find yourself in a temporary difficulty, do not hesitate to contact your credit counsellor who can offer you various options to deal with the adverse situation.

Urgent needs and pressing payments often force us to take out new and new loans to repay our old arrears until we fall into what is known as a financial spiral. Here comes the possibility of refinancing the overdue loans and merging them into one.

By pooling your loans, you have the option to take out a higher-value loan to repay the remaining smaller loans and so reduce your monthly payments. The main advantage of bundling loans is the ability to ease your budget by paying a single monthly payment and keeping only one due date.

At Light Finance, we can guarantee you peace of mind, predictability and control over your repayments, despite your deteriorating credit history. If you are in the situation of the Stoyanov family, do not hesitate to contact one of our advisors here to discuss possible options for stabilizing your financial situation.

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