Can we expect a bad credit history to “disappear”: an expert explains the data retention period
A credit history serves as a financial passport, containing information about all a person’s credit obligations. Banks analyze this data to determine the client’s solvency, which helps them make informed decisions about granting loans.
What to do if your credit history turns out to be unsuccessful? This question is especially relevant for Ukrainians who, due to the war, found themselves in difficult financial situations. Is there a mechanism in Ukraine that allows an unfavorable credit history to “disappear” over time?
According to a financial expert, the main reason for the deterioration of your credit history is the untimely fulfillment of loan obligations. Even minor delays in repayment, for example, of a few days, can already be considered a violation of the contract terms.
Regularly missing payments or ignoring debts can seriously affect your credit rating. In addition, the following actions can also negatively affect your financial profile:
issuing numerous loans at the same time;
frequent applications for new loans within a short period of time;
lawsuits from banks or collectors;
non-payment of credit card and microloan debts.
Thus, you should be careful about your financial obligations, because even minor mistakes can have long-term consequences for your credit history.
Credit history reset: reality or myth?
The widespread belief that credit history is automatically “reset” after a set period, such as several years, is false. The expert notes that in Ukraine, information about credit obligations is stored for up to 10 years from the date of the last update. Even after the loan is fully repaid, data on previous delays remain valid.
However, it is worth remembering that negative records may lose their significance over time. If a person conscientiously fulfills all credit obligations and uses other financial instruments responsibly for several years after the problem period, their credit rating may improve. This is a key factor in improving credit history.
Thus, even if your “financial passport” has experienced difficulties, there is always an opportunity to correct the situation by adopting a gradual, conscious approach to managing your debts and finances.
Meanwhile, in Ukraine, changes to the rules for collecting alimony and new mechanisms for verifying payments are under consideration, which could affect citizens’ financial situation.
