Question 1

Information about Score and Credit History

Accepted Answer

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.

The corresponding information is available also at abcfinance.am and acra.am.

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 sending a letter to the Bank’s official email address (office@ardshinbank.am)

• by contacting the Bank’s 24/7 call center (tel. 012222222);

• by submitting a written application/complaint/request at any branch of the Bank.

Question 2

Important to know

Accepted Answer

Warning! In the event of the customer’s failure to make a timely redemption of the interest sums and loan amounts, the information thereon shall be submitted to the Credit Registry of the Central Bank and ACRA Credit Reporting CJSC.

Decision-making and loan issuance timeframes:

After submitting the necessary documents and receiving a preliminary approval, the final decision shall be made and the Customer shall, within 5 business days, receive a notice thereon.

After the final decision-making, the credit line shall be issued within maximum 3 business days.

Factors conducive to issuing a credit line include, but are not be limited to, satisfaction of the terms of lending and submission of the necessary documents and records established under the document list.

The factors accounting for credit line rejection include a failure to meet the terms of lending herein, submission of non-credible or incomplete information and documents, or other cases stipulated under the Bank’s rules of lending.

Creditworthiness evaluation shall be made based on the Bank’s internal screening mechanism.

Decision validity period: 15 days

ATTENTION: the nominal interest rate for this loan is subject to change by the Bank.

Financial institutions	15.8%
Energy (electricity, natural gas, steam and high-quality air supply)	16.3%
Healthcare	16.5%
IT and communication
Education apart from public schools (SNCOs)
Mining industries and exploitation of open mines	17.8%
Public schools (SNCOs)	16.5%
Ministries, local governments, regional administrations and government institutions other than the security, defense and law enforcement agencies	18.2%
Interest rate for employees of security, defense and law enforcement agencies and companies in sectors other than those indicated above	20%
In case of having a sufficient credit-worthiness score	14.80%

2	Requirements for employer organizations
	The organization from which the customer receives the monthly money consideration serving as a basis for receiving the credit line shall be accredited by the Bank.

Advantages