A sound credit record depends on repaying loans in full and on time. Even a small unpaid balance or a transfer that clears late can count against a borrower.
A credit history builds over time, recording how a borrower handled earlier debts, how many loans they have now and whether new borrowing is affordable. Svetlana Frumina, a finance and fintech department head at Plekhanov Russian University of Economics, told Prime that people should take out only loans they can repay without putting excessive pressure on their household budget.
Timely, full instalments are the basis of a positive record. Banks, microfinance companies and other lenders report loans, balances, terms and payment activity to credit bureaus. The resulting history shows whether a borrower keeps to the schedule and settles debts in full.
Late payments are the main cause of a damaged record. They can follow financial hardship, but also simple mistakes: forgetting a due date, paying less than required or not allowing enough time for a bank transfer to clear. Even a small outstanding amount can become overdue.
A poor credit history cannot simply be erased and replaced with a new one. Frumina’s practical advice is to borrow within one’s means and check that every payment arrives on time and covers the full amount due.