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How to Understand Your Personal Credit

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AIB brings you a guide to the vital things you need to know about your personal credit and how to manage this credit responsibility.

If it’s your first time applying for personal credit, there are a number of factors you should be comfortable with. These include being able to identify which product is best for you and understanding your credit history. We provide you with some handy tips for managing personal credit responsibly and take a look at the things you need to know before applying.

What is your ‘Credit History’?
A person’s credit history is a record of their previous behaviour with money in terms of borrowing and repaying. Your ability to fulfil your financial commitments is calculated based on this and it may include credit cards and loans you’ve had in the past.

A strong credit history is important when you’re applying for personal credit, as it shows financial responsibility and that you are dependable in terms of making your repayments. The best way to make sure you keep a strong credit history is to have a weekly or monthly budget in place to keep on top of your payments. This way, you won’t borrow more than you can afford.

Factors you should consider
You need to take several factors into account before applying for personal credit. These include:

• Personal Credit Requirements – the purpose you require the personal credit for i.e. the purchase of a car, to pay bills or for everyday items

• Budget for Repayments – the amount which you can afford to responsibly borrow and repay given your present financial situation

• Financial Flexibility – the likelihood that your circumstances will change and you will need to alter your monthly repayments

It’s crucial to consider the factors above when deciding on which type of personal credit may be right for you. From personal loans to credit cards, it’s important to make sure you pick the best option.

How to manage your credit
After you’ve taken out your personal credit, manage it effectively by following these simple steps:

• Firstly, based on your current income, make sure you borrow the correct amount. Use the AIB Personal Loan Calculatorto make sure the amount you will have to repay fits in with your current expenses and income.

• Plan your savings and spending by creating a budget with the AIB Family Finance Budgeting Tool. This will make sure all your commitments financially are honoured and will keep you feeling in control.

• Make sure to take into account any changes that are likely to occur to your financial circumstances in the near future and take these into account for your repayment plan and budget.

• For maximum convenience and to make sure you never miss a payment, set up automatic payments.

Whether you’re planning home improvements, some travel or a new car, AIB can assist with one of our AIB Personal Loans. Get a quote or apply online with us today through AIB Internet Banking and get approval within 3 hours*.

Lending criteria, terms and conditions apply. Credit facilities are subject to repayment capacity and financial status and are not available to persons under 18 years of age. Security may be required.

*Although we aim to provide a decision within 3 business hours, this period may be extended for technical or other legitimate reasons. Our business hours are Monday to Friday from 9am to 5pm, excluding bank holidays.

Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland.