My WordPress Blog

What does credit history say?

Few consumers in Lithuania have a habit of inquiring about their credit history before applying for a loan or paying for a hire purchase. While many tend to think they know everything about themselves, experts recommend that you check your credit history periodically to avoid unpleasant surprises when you need financial services.

Credit history is often referred to as the “black box”, which holds for decades a record of financial obligations, how they are discharged, or how well they pay their bills for telephone, electricity and other services. “Credit history is like a resume of human financial strength and discipline,” says Andrius Bogdanovic, CEO of Fezziwig.

Although more than 220 thousand people are interested in their credit history in Lithuania. population, this concept still faces the myths prevailing in the country. So how do you build a good credit history and keep it healthy?

What Is A Credit History?

What Is A Credit History?

Credit history is like a mirror, allowing you to see everyone’s financial habits and ability to deal with them. The credit history consists of two parts, one of which is information about financial obligations, such as credit cards you own or have held, consumer and mortgage credit, etc. The second, but not least, information about your payment history, other obligations such as telephone bills, utilities, and others.

Everyone builds their credit history from adulthood when they make their first financial commitments – start using a credit card, take out a consumer loan, buy a car leasing. Borrowing responsibly and paying your liabilities on time creates a good credit history. On the contrary, borrowing impulsively and inadequately can delay the credit history of repayments of financial liabilities.

Finance, telecommunications, insurance, transport, fuel supply, postal and many other companies in the country provide data to the credit bureau, which mirrors this data in credit history. This means that only the data provided by the creditors is shown in the credit history.

Faces the prevailing myths

Faces the prevailing myths

According to, a growing number of clients know what their credit history is and are familiar with. Agnė Volosenkinaitė, the head of real estate products for the longest-running platform in the country, also notes that while people are no longer surprised at checking their credit history while borrowing, there are places to improve.

“We often remind our clients that financial commitments, such as loans for consumer, vehicle purchase or other purposes, can be a timely and responsible way of building a good or improving credit history. Such practice is very popular in foreign countries, but in Lithuania it is not understood that the current loan may help to obtain more favorable financing conditions in the future, and some people even fear that it will worsen their credit history, ”says A. Volosenkinaitė.

A. Bogdanovich mentions another myth prevalent in society – supposedly credit history can be erased.

“We often receive requests to delete data so that it is not visible to financial, telecommunications or other businesses. However, such applicants are disappointed because the correct data is not “artificially returned” or erased until the credit bureau has a 10-year period to process it, “says Bogdanovich, stressing that the number of such requests is decreasing.

Steps towards a good credit history

Steps towards a good credit history

If you want to keep your credit history intact, it is recommended that you follow 5 rules that will help you have a good financial standing and discipline:

Borrow moderately and responsibly. The Bank of Lithuania proposes a 40 percent rule, which requires borrowing to calculate a maximum of 40 percent per month for loan repayment and interest payments. of regular income.

  • Old obligations not to be more expensive. It is recommended that you avoid borrowing to cover old liabilities unless you refinance them on more favorable terms.
  • Do not borrow for a down payment on the loan. For example, it is recommended that you do not borrow for a mortgage loan contribution.
  • Pay credit, utility bills, utilities and other goods on time.
  • Periodically access your personal credit history report.

Leave a Reply

Your email address will not be published. Required fields are marked *