Do you have a good credit limit?
The credit limit of a person or company is established through analyzes that seek to know the ability to honor financial commitments, ie, serves to stipulate a maximum amount of credit that could be granted to this person or company, so that they can be paid without major difficulties, reducing the risk of default. Like the pre-approved loan.
To reach the amount of the credit limit that can be granted, financial institutions make use of the analysis of the financial history of the person seeking to have credit. Information such as bank statements, income tax returns and consultation with bodies such as the SPC and SERASA are very common. In some cases, even the signature of guarantors is requested to reduce the risks to those who are granting the credits.
Some financial entities such as banks stipulate that the maximum percentage of a person’s income commitment to the payment of fixed installments is 30%. This means in practice that a person receiving a salary of $ 1,000 could have a maximum of $ 300 per month committed for installments to be paid on a personal loan or property financing.
This percentage of 30% is what is used when you seek to carry out a financing of a house, apartment, new or used car, and other property. That is why some people do not have the credit approved in the financing to buy their own home, for example, because the percentage of the salary that would need to be committed so that the person can pay the installments of the financing is higher than the 30% considered safe.
Institutions such as credit card operators work with a different percentage. Some even grant a credit of up to 80% of the person’s total income. Of course, this high credit limit is used as a tactic to stimulate consumption, but it is not a problem if it is well used. It is up to the credit owner to know how to divide the amount of credit used in installments that do not negatively affect their finances.
The credit limit basically facilitates borrowing. In order to enjoy this facility, it usually needs to be renewed for another period, usually every three months. In order for you not to have your limit diminished or not granted, it is necessary that you keep the cadastral situation up to date and over the protective organs.
Stay away from debt, pay everything up and honor your financial commitments. With a good financial history you can even increase your credit limit and there you can achieve even greater dreams.