A record of late payments does not always rule out a new loan, but it can make an application harder to assess. Banks consider how long payments were overdue and a borrower’s existing debt burden, a Plekhanov University expert told RIA Novosti.
In a RIA Novosti report published October 8, Tatyana Belyanchikova, an associate professor at Plekhanov Russian University of Economics, said a delay of a day or two may weigh less in a credit assessment than arrears lasting weeks or months. She said scoring systems consider not only whether a payment was late, but also the length of the delay.
The expert cautioned against taking out new loans to repay old debts. She advised borrowers to address current arrears first and discuss restructuring or refinancing with their lender. The Bank of Russia says loan and payment information is considered when assessing a borrower’s debt burden.
If a bank declines an application, Belyanchikova suggested approaching a lender that already knows the customer, such as a payroll bank. Collateral, a guarantor or a co-borrower may also affect the assessment. Frequent applications to microfinance organizations, she said, may be viewed by banks as a sign of financial strain.