One fifth of consumers intend to use financial services such as leasing, credit card or consumer credit during the holiday period. However, many consumers are unaware of what part of their salary should be exceeded when planning their commitments and what to do after a holiday in the event of a down payment, says a study by Good Finance.
A survey of more than 10,000 residents found that 8% of respondents would use credit services for their holiday shopping. 9% of men and 7% of women will choose financial instruments to buy gifts and other purchases. Some consumers are still undecided and are just considering buying gifts from their own or borrowed funds: 12% of men and 10% of women choose the answer “maybe”. The rest refer to gifts and other purchases that you plan to buy from your own funds during the holiday season.
When making new commitments
It is important to be honest with myself and answer a few questions: What part of my salary credit payments do I spend now? Will my salary be enough for the increased costs? What is my plan ‘B’ if my money falls short after a few months? Answers to these questions will make you feel safer and maintain a good credit history, ”comments Andrius Bogdanovičius, CEO of Good Finance Credit Bureau.
According to him, nearly one-tenth of the survey respondents indicate that when borrowing responsibly, you can spend between 40% and 50% of your monthly salary on credit payments. 30% of survey respondents state explicitly that the share of income on credit payments should not exceed 40% of income (as stated in the Responsible Lending Policy). Most, or 60% of consumers, responded that the income-contribution ratio should not be as high as 35%. This is a more conservative approach that we may also consider fair.
Respondents were also asked how they would behave in the event of a shortage of cash credit after the holidays. The majority of those surveyed would choose to consult a financial institution on their plan B (69%). In comparison, 23% would pay part of the premium in this situation and overdue the rest. A further 5% would take no action and the payment would be overdue, while 3% would like to take on new credit.
Financial institutions should be approached
When there are first signs that monetary affairs are moving in the opposite direction. Advance to a creditor and search for a compromise can help prevent your credit history from deteriorating. The worst thing to do is to do nothing or the so-called pyramid, which is a new credit to cover your down payment. It is true that this solution may be the right choice in exceptional cases. For example, when one creditor refinances credits from other financial institutions on favorable terms, ”says the head of the credit bureau.
Survey results show that the vast majority of consumers (85%) know that their credit history is assessed when applying for credit services. Other cases of legitimate interest in a financial discipline CV are far less well known. For example, only 28% of respondents stated that credit history can be verified by a telecommunications company that is late in paying for its communication services. Even less known is that credit history can be checked with a late friend (5% correct) and with a view to renting a home (correct 6%).
The survey was conducted December 9-16 online. More than 10,000 users responded to the survey.
My Good Finance is a self-service website
Where residents can check their personal credit history report. It consists of available financial obligations, payment history, credit rating, what creditors were interested in customer data. The report is free once a year.
The self-service website is managed by the credit bureau Good Finance. A credit bureau is a system of responsible lending where the creditworthiness of customers is assessed by banks, credit unions, consumer credit, leasing, telecommunications and other companies. The credit bureau plays an important role in the financial system by helping financial institutions make sound credit decisions and protecting consumers from excessive obligations.