INFORMATION REGARDING CREDIT HISTORY AND CREDIT SCORE

The customer’s credit history and summary credit score are important elements in making a decision on granting a loan as before making a decision to grant a loan, the Bank examines the customer's credit history and assesses how responsible the latter is as a borrower.

The credit history is a summary of the customer’s financial obligations, which represents the borrower’s credit behavior, information about the current and paid obligations, the payments made, as well as the given guarantees. Positive credit history can be generated in case of paying off the loans in a timely manner and using them for the purpose they have been taken. "Bad credit history" built up over the years can be a reason for denying financing.

The credit history includes data for the 5 years preceding the time of the loan inquiry and is formed by:

• the customer's credit obligations, including their number and amount,
• the amount, type, terms of each obligation,
• the information on the collaterals securing obligations,
• the conscientiousness of obligation repayments (whether the interest and principal amount were paid on time or not),
• the guarantees provided to other persons, their quantity and amount, the type of loan secured by each guarantee, terms and information on collaterals,
• the availability of overdue days/amounts in terms of obligations and guarantees, as well as penalties and fines set for them,
• unpaid or overdue receivables

The credit score is a numerical assessment evaluating creditworthiness and solvency based on a study of the customer’s credit history which shows how responsible the customer is as a borrower. If the customer has never had a loan, the latter cannot have a credit score.

"ID Bank" CJSC uses the Bank's own credit score as a customer credit score, the main factors underlying which are:

Impact of the loan inquiry on the credit score

Based on the customer’s consent, “ID Bank” CJSC makes inquiries to “ACRA Credit Reporting” CJSC (hereinafter Credit bureau) regarding the credit history, in order to consider the opportunity of granting a new loan/increasing the amount of the existing loan at the latter’s initiative, becoming a guarantor of the obligations of a third party/parties, as well as in cases of existing monetary obligations. Depending on the service the customer applied for, the type of the performed loan inquiry can affect the credit score in a different way. Details on the purposes of the inquiries and their impact on the credit scores are provided in the table below:

Correction of incorrect or incomplete data

If there are incorrect or incomplete data in the customer's credit history, for the purpose of clarification and correction, the latter may inform Credit Bureau or directly contact the Bank providing the information. Informing the Credit bureau can be done by submitting an appropriate written application or electronically from "My ACRA" online personal office.

Steps to improve the credit history and credit score

To improve the credit history and the credit score, it is necessary to first fix the main causes of their deterioration, in particular, it is necessary to pay off current overdue obligations as soon as possible, as well as to:

• reduce the credit burden by paying off existing loans, partially or completely,
• make repayments in accordance with the established schedule, excluding delays and showing punctual behavior,
• reduce the quantity and amount of the given guarantees, ensuring the full repayment of overdue obligations for this part, in case of availability,
• avoid becoming a guarantor for untrustworthy persons,
• avoid applying for new loans frequently.
Details via abcfinance.am and acra.am links.