What is credit history?
Under the law of the Republic of Armenia “On Circulation of Credit Information and Activities of Credit Bureaus”, credit information is any information about the liabilities undertaken by the subject of information, which reveals the debts, payments, payment habits or any other information about the liabilities or the performance thereof (that are being taken into consideration by financial organizations upon the issuance of credits, as well as by manufacturing, selling and service providing organizations while making a decision on the realization of goods/services based on the principle of instalment payments).
Importance of credit history
A negative credit history recorded in the past may serve as grounds for the tightening of the terms of credit or the non-issuance thereof.
A credit report is a written or electronic document which contains credit information on the performance of the financial liability in relation to the subject of the credit information (natural person or a legal entity) and the entrepreneurial organizations taken over by the latter.
The report shall comprise data obtained as of the moment of the inquiry from organizations affiliated with ACRA and shall reflect credit data of the 5 years preceeding such an inquiry.
ACRA is a credit bureau collaborating with all the banks and credit organizations in the Republic of Armenia.
Types of the score being applied
The evaluation of credit worthiness in ARDSHINBANK CJSC involves the ACRA credit history, the FICO score mark and the Bank's internal screening mechanism.
What is a credit score mark?
A FICO score is a screening system processed jointly by the closed joint stock company (CJSC) ACRA Credit Reporting and Fair Isaac Services which, conducting a statistical study of the client's credit history, gives the digital mark of the credit worthiness of the client’s credit risk as a pivotal instrument for the dimensioning of the consumer crediting risk.
Main factors influencing the score
According to FICO score calculation model, the determiners influencing the score include:
1. Payment (redemption) history;
2. Credit burden;
3. Length of credit history;
4. Types of used loans;
5. New credit application.
The Bank's internal screening mechanism is influenced by
1. Information about bank and deposit accunts, transactions made therewith and information about transfers;
2. Information about credit history;
3. Information about income and employment history;
4. Information about family status and education;
5. Information about the ownership of immovable and movable property;
6. Information about the servicing of other liabilities;
7. Any other information characterizing the client.
Credit inquiry influence on the score mark
The number of credit inquiries may have a negative impact on the concise credit mark. If the inquiry is conducted as part of a monitoring, it does not normally have a negative impact.
How to avoid a deterioration of a credit history and a score mark?
1. To discharge the credit liabilities in a due manner without delays in accordance with the established schedule;
2. To avoid being a co-borrower and/or guarantor, etc. with respect to the liabilities of borrowers with a suspicous or negative credit history;
3. Upon making redemptions of credit liabilities through a payment terminal, to take into consideration the fact that payments made after 4:45pm, i.e. – the Bank's operational hour, are rescheduled to the next business/operational day and the payment is deemed made on the next day.
How to improve credit history and the score mark?
1. To redeem the overdue liabilities if any;
2. To discharge the credit liabilities in a due manner without delays, and to rule out even daily delays thereof;
4. To avoid being guarantors for non-trustworthy persons in the future.
Who to turn to in case of errors in the credit history?
Whenever the borrower’s credit history contains errors or incomplete data, the borrower shall:
1. pursuant to the clauses set forth in Article 20 of the law of the Republic of Armenia “On Credit Information or Activities of Credit Bureaus”, inform the credit bureau thereof or simply turn to the subject providing such information (the source of credit information). The notification may be arranged by way of submitting a corresponding written application to the credit bureau, or electronically, i.e. – in an online regime from the personal office My ACRA. The process of the acceptance/receipt and consideration of clients’ complaints (as submitted by ACRA), and the response thereto and the succession of actions shall be determined subject to the "Dispute Resolution Procedure" of ACRA Credit Reporting. Corresponding information is available also at abcfinance.am and acra.am
2. Turn to the Bank
• by contacting the Bank’s 24/7 call center (tel. 012222222);
• by submitting a written application/complaint/request at any branch of the Bank.
