Even though we don’t usually think about it, knowing our credit score is very important. This three-digit number reveals a lot about us and tells the lender if a loan should be issued. Credit score is important both to large loans, such as a mortgage, and also for smaller ones – when applying for a credit card or billing contract for a service. The higher your credit score, the better!
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15.02.2021
What is the credit score and why is it necessary?
A credit score is a number which states the ability to qualify for a loan, as well as helps the creditor to decide what loan terms they can offer. A credit score numerically determines the probability of you paying the loan back and doing it on time. The higher the credit score, the better the chance of qualifying for a loan and getting a better deal on it.
In order to evaluate your credit score, the lender mainly takes into account your borrowing habits – how are the loans paid back, how many current loans you have, whether the payments are done on time. The information lets the lender know how big the risk is of issuing a loan.
Moreover, when the credit score is calculated, social and demographic factors, such as your age, income, education, employment, marital status and number of dependents are also noted. However, such personal data, as your gender, religion or race are not taken into consideration when calculating the credit score.
What similarities does credit score and credit history have?
Credit history is an overview, in which our borrowing habits, previous existing loan commitments and our record of paying them off on a timely manner is shown. It is a detailed description that helps you understand where the score is coming from. Credit score and credit history capture the same information. However, the way that it is presented – differs.
A credit score is calculated based on a formula, where every element has its own weight according to its importance. After the calculations, a number is displayed, which quickly shows how trustworthy a client is.
If you want to know what the number of your credit score means, check out our article on credit history.
How to get a good loan offer?
It is important for the lender that you are a trustworthy client, who takes commitments seriously. If your credit score can convince a lender that you are such a client, the lender will be happy to offer you good terms on your loan.
Paying your credit and bills in a timely manner, regular and official income, as well as reasonable existing credit will help you get a good loan offer. Moreover, a stable official income is a very important indicator. That is why you will receive a more favorable offer if you are past the trial period in your new workplace.
It is also important how you use credit and how much of your monthly income is spent on credit payments. If you spend 40% or more of your income on credit payments monthly, the lender might see you as a higher risk client.
If you don’t have a score at all it means that your credit history is not sufficient enough yet – you do not have any loans, the data is outdated or there just is not enough data to base a credit score on (for example, if your data only consists of utility payments).
Remember! Even though creating and improving your credit score may not seem relevant right now, it is a long-term process. That is why we suggest paying your bills on time and borrowing responsibly.
Where does the lender receive information about your credit score?
When a person enters a contract about receiving a loan, the loan issuer provides the Bank of Latvia credit registry or any credit information bureau with information about the person and the terms on which the loan is issued. The information is stored there. These registries also store information about late payments (for example, for utilities, phone bills, etc.).
Agreement of the provision of mortgage broker services
Customer: a natural person who is using (or will use) the Broker’s services and has signed (or will sign) this Agreement on the provision of mortgage broker services or has accepted (or will accept) the provisions of this Agreement on the provision of mortgage broker services by using the online web application (https://loans.dmcbonds.com/)
Broker: Akciju sabiedrība “Direct Mortgage Capital”, registration No. 40103968207, legal address: Ganību dambis 3/1-8A, Rīga, LV-1045, address of the actual place of provision of the service: Pulkveža Brieža iela 15, 5th floor, Rīga, LV-1010, email address: info@dmcbonds.com
Guarantor: a natural person who is willing to provide a guarantee for the Customer’s liabilities arising from a mortgage loan agreement which could be closed as a result of using the Broker’s services, and has signed (or will sign) this Agreement on the provision of mortgage broker services or has accepted (or will accept) the provisions of this Agreement on the provision of mortgage broker services by using the online web application (https://loans.dmcbonds.com/)
Whereas:
(a) The Customer wishes to use the Broker’s services and receive a financing offer for a mortgage loan or other type of loan secured by real estate;
(b) Customer may invite Guarantor as one of the loan’s securities;
(c) The Broker is registered in the Register of mortgage brokers and their representatives maintained by Consumers Rights Protection Centre (available online www.ptac.gov.lv) on February 27, 2019. with the registration No. KS-09;
(d) The Broker cooperates several licensed bank and non-bank lenders (hereinafter the Lender or Lenders) as an independent broker.
In case the terms of this Agreement on the provision of mortgage broker services are approved by the Customer in the online web application or Customer has signed this Agreement during face – to – face meeting or signed with electronical signature, it is considered that the Customer and the Broker (hereinafter collectively/separately - the Parties/Party) enter into this agreement (hereinafter – the Agreement) with the following provisions;
In any case, the Parties agree that the provisions of the Agreement apply equally to both the Customer and the Guarantor, except for the clauses of the Agreement where only the Customer or the Guarantor is mentioned. In this case, the relevant clause of the Agreement applies only to the Party (Customer or Guarantor) referred to in the relevant clause of the Agreement
In case the terms of the Agreement on the provision of mortgage broker services are approved by the Guarantor in the online web application or Customer has signed this Agreement during face – to – face meeting or signed with electronical signature it is considered that the Guarantor and the Broker (hereinafter collectively/separately - the Parties/Party) enter into this agreement (hereinafter - Agreement) with the following provisions;
In any case, the Parties agree that the provisions of the Agreement apply equally to both the Customer and the Guarantor (hereinafter – Other Party of Agreement), except for the clauses of the Agreement where only the Customer or the Guarantor is mentioned. In this case, the relevant clause of the Agreement applies only to the Party (Customer or Guarantor) referred to in the relevant clause of the Agreement.
1. Subject of the Agreement:
1.1. With this Agreement, the Broker undertakes, on the basis of the application of the Other Party of the Agreement, to take all necessary actions for the Customer to receive financing offers from the Lenders for a mortgage loan or other type of loan secured by real estate.
1.2. Within the framework of the Agreement, the Broker provides the following services to the other Party to the Agreement (hereinafter - Services):
a) The Broker collects the data and documents of the Other Party of the Agreement, necessary for granting the loan, including assessing the ability of the Customer and the Guarantor (if the Guarantor is invited) to repay the loan; Data collection is effected personally or by means of web application https://loans.dmcbonds.com/) developed and maintained by the Broker (hereinafter – Web App)
b) The Broker performs a manual analysis of the information collected, structuring the deal and preparing a loan file for the Lender;
c) The Broker informs the Customer about the received financing offers from Lenders or referring the Customer to the particular Lender (depending on the type of loan requested by the Customer).
1.2. When rendering the Services referred to in Clause 1.1. and other related obligations arising from the Agreement, the Broker shall act honestly, fairly, transparently and professionally, taking into account the rights and interests of the other Party to the Agreement.
1.3. The Customer shall pay a fee to the Broker for the provision of Services in accordance with the provisions of the Agreement.
2. Provision of Services
2.1. The provision of services shall be commenced after Parties has concluded this Agreement and the Broker has received information necessary for Customer’s and Guarantor’s (if Guarantor is invited) ability to repay the loan and making a loan decision;
2.2. If for any valid reason the other Party to the Agreement has not been able to finish the Web App, to finalize registrations process and to confirm provisions of this Agreement, the Broker performs all necessary activities, to conclude this Agreement in paper form or to sign it with electronical signature, and informs Other party about necessary information for assessing of the Customer's and the Guarantor’s (if Guarantor is invited) ability to repay the loan and making a loan decision, as defined by the Broker, shall be submitted to the Broker in person or by other secure means of communication.
2.3. The Broker does not cooperate with all lenders operating in the market, therefore, cannot guarantee the other Party to the Agreement the lowest price or the most favorable conditions. However, the Broker undertakes to act in the best interests of the other Party to the Agreement in search of suitable financing arrangements for the other Party to the Agreement.
2.4. The Customer shall independently decide on acceptance or rejection of financing offers provided by the Broker and the Broker shall not be responsible for any possible consequences that may result from further cooperation between the selected Lender and the other Party to the Agreement.
3. Broker Fee
3.1. The Broker Fee is up to 2% of the loan amount granted to the Customer (hereinafter – Broker Fee). The Customer shall pay the Broker Fee according to the following:
3.1.1. The Customer pays Fee in accordance with the invoice issued by the Broker, which is sent to the Customer’s e-mail address, issued to the Customer in paper form or made available to the Customer by any other means of communication; or
3.1.2. The Customer pays Fee to the Lender in accordance to the invoice issued by the Lender, which is sent to the Customer's e-mail address, issued to the Customer in paper form or made available to the Customer by any other means of communication. In this case, the Broker explains to the Customer the payment procedure and whether or not this fee will be partially or fully credited to the commission.
3.2. In the course of fulfilling the obligations in accordance to this Agreement, depending on the chosen Lender, it is specified which method of payment of the Broker Fee will be used.
3.3. In any case, the Broker Fee is paid only after the conclusion of the loan agreement between the Customer, the Guarantor (if the Guarantor is invited) and the respective Lender.
3.4. When cooperating with the Lender, Customer can have additional expenses for the services provided by the Lender, which he (she) should pay to the Lender; the amount and payment procedure shall be determined by each Lender.
4. Requesting of Customer’s and Guarantor’s data from third parties
4.1. As part of the provision of the Services and for the performance of Broker’s obligations under the Agreement, Broker shall request from third parties and receive the other Party's data necessary to evaluate the Customer's and Guarantor's (if Guarantor is invited) ability to repay the loan:
4.1.1. from AS “Kredītinformācijas birojs” (Reg. No. 40103673493, legal address: Grēdu ielā 4a, Rīga, LV-1019, Phone: +371 66934700, info@kib.lv) Broker receives credit information accumulated for the other Party to the Agreement (any information from AS “Kredītinformācijas birojs” describing the creditworthiness of the other Party to the Agreement, including information on current and discharged credit obligations, delinquencies, assigned credit rating);
4.1.2. from SIA “Creditreform Latvija” (reg. No. 40003255604, legal address: Skanstes iela 52, Rīga, LV-1013, phone: +371 67501030, debt@creditreform.lv) Broker receives accumulated information about the debt history of the other Party to the Agreement (a total of negative cases fixed by SIA “Creditreform Latvija” where the other Party to the Agreement has failed to fulfill its obligations to the creditor within a reasonable time);
4.1.3. from the State Revenue Service of the Republic of Latvia Broker shall receive the accumulated information on the income of the other Party to the Agreement for the period not exceeding the last twenty-four months before the date of requesting the data. The aforementioned information shall be received through the AS “Kredītinformācijas birojs”;
4.1.4. from any bank or branch of a bank whose remote identification tools are used to identify the other Party to the Agreement in the Application, Broker receives statements of accounts opened in the name of the other Party to the Agreement for a period not exceeding twelve months prior to the date of the request. Information is provided by Instantor AB (company registered in Sweden, Reg. No. 556818-2835, legal address: Vasagatan 16, 111 20, Stockholm, Sweden; privacy@instantor.com) and KONTOMATIK UAB (company registered in Lithuania, reg. No. 304852516, Legal address: Upės 23, LT-08128 Vilnius, Lithuania; contact.lt@kontomatik.com).
4.2. Broker's refusal to provide the Services, the Lenders' refusal to grant the loan to the Customer, the termination or performance of the Agreement shall terminate Broker's right to further data requests for the other Party to the Agreement, but the provisions of the Agreement regarding personal data processing shall remain in effect.
5. Personal Data Processing
5.1. The Broker is the controller of personal data of the other Party to the Agreement (hereinafter – Personal data).
5.2. Information on the purposes of the Personal data processing, the basis for processing, the categories of data to be processed, the data retention period, the categories of data recipients, and the other Party’s as data subject's rights is outlined in the Broker's Privacy Policy, available on the Broker's website (www.dmcbonds.com), as well as at the Broker's office.
5.3. In order to fulfill obligations arising from this agreement, the Broker shall transfer Personal data necessary for granting the loan, assessing the Customer’s and the Guarantor’s (if Guarantor is invited) ability to repay the loan and taking the funding decision to Lenders. The Broker, at the request of the other Party to the Agreement, shall provide the other Party to the Agreement with information about the Lenders who received the Personal data and types of Personal data transferred to each lender.
5.4. Each Lender to whom Personal Data is transmitted under this Agreement shall become an independent Controller of Personal Data.
5.5. The Broker cooperates with bank and non-bank Lenders. Depending on the requested loan type as well as other circumstances such as the other Party’s credit history and debt history Personal data can be transferred to banks:
AS “Citadele banka” (Privacy Policy: https://www.citadele.lv/lv/atbalsts/fizisko-personu-datu-apstrade/)
AS “PrivatBank” (Privacy Policy: https://www.privatbank.lv/noteikumi/personal-data-processing/)
Or to the licensed non-bank Lenders:
SIA “Grand Credit” (Data processing rules: https://grandcredit.lv/lv/fizisko-personu-datu-apstrades/)
AS “Hipocredit” (Privacy Policy: https://www.hipocredit.lv/media/privacy-policy.pdf ).
If within the Broker’s business activities the Broker enters into partnership with other Lenders (banks or non-bank Lenders) that are not mentioned above, the respective Lender shall process Personal data according to its personal data processing rules which is available in the respective Lender’s web page.
5.6. The Broker does not intend to transfer Personal Data to countries outside the European Union / European Economic Area, but if it does, it will do so in accordance with the applicable legal provisions regarding the processing and protection of personal data.
5.7. If Customer notifies Broker in the Application (or otherwise informs Broker) that he wishes to receive a loan with a state guarantee (AS "Attīstības finanšu institūcija ALTUM", Reg.No.50103744891, hereinafter "Altum"), Broker will transfer to Lenders also personal data of children dependent on the Customer. Altum is an independent controller of the personal data of the Customer and its dependent children. Altum has a legal basis for processing the personal data of the Customer and its dependent children, as well as for exchanging information with the Lenders on the Customer, the Customer's credit history, marital status, security offered, residence, payment discipline and other necessary information.
5.8. If a state-guaranteed loan is not executed Broker, the relevant Lender and Altum will cease processing the Customer's and Customer's dependent children data as soon as the statutory period for the storage of such data has elapsed.
6. Rights and Obligations of the Parties
6.1. Broker’s obligations:
6.1.1. When rendering the Services and other related obligations arising from the Agreement, to act honestly, fairly, transparently and professionally, taking into account the rights and interests of the other Party to the Agreement;
6.1.2. within a reasonable period of time, but not later than within 3 business days after receiving the Customer’s request to provide the Customer with comprehensive information on the course of provision of the Services and on the refusals of the Lenders to grant financing (if any);
6.2. Broker’s rights:
6.2.1. to request and receive from the other Party to the Agreement information (other than that is received via Web App) necessary for granting the loan, assessing of the Customer's ang Guarantor’s (if Guarantor is invited) ability to repay the loan;
6.2.2. to transfer the information and documents received from the other Party to the Agreement and information about the other Party to the Agreement, which the Broker will legally acquire from other sources by means of Web App, to Lenders in order to take a loan decision and prepare an offer to the Customer;
6.2.3. not to submit the Customer’s loan application to the Lenders, if the other Party to the Agreement, at the request of the Broker, does not provide or provides insufficient amount of information and documents necessary for assessing the Customer's and Guarantor’s (if Guarantor is invited) ability to repay the loan and making a loan decision or if other Party to the Agreement provides the Broker with false information;
6.2.4. not to submit the Customer’s loan application to the Lenders who, on the basis of the information provided by the Customer, have rejected the Customer's loan applications within 90 days prior to the conclusion of the Agreement or if the Broker reasonably believes that the Customer’s loan application will be rejected by the Lenders for any reason;
6.2.5. to receive the Broker Fee if the Customer enters into a loan agreement with the Lender as a result of providing the Services.
6.3. Customer’s obligations:
6.3.1. To provide the Broker with complete and true information and at the request of the Broker to submit additional documents necessary for assessing the Customer's ability to repay the loan and making a loan decision;
6.3.2. To provide the Broker with complete and true information about whether the Customer has submitted loan applications to any banks or non-bank lenders within 90 days prior to the conclusion of the Agreement and whether the Customer’s loan applications have been declined (specifying the reasons);
6.3.3. to immediately inform the Broker of any changes to the information provided to the Broker under the Agreement.
6.3.4. to pay the Service Fee according to the Broker’s instructions;
6.3.5. In case if Customer decides to apply for a loan collectively with a Guarantor, the Customer shall provide that the Guarantor enters into the Agreement on providing mortgage broker services with the Broker.
6.4. Guarantor’s obligations:
6.4.1. To provide the Broker with complete and true information and at the request of the Broker to submit additional documents necessary for assessing the Customer's and Guarantor’s ability to repay the loan and making a loan decision;
6.4.2. to immediately inform the Broker of any changes to the information provided to the Broker under the Agreement.
6.5. Customer’s rights:
6.5.1. to request and receive information on the course of provision of the Services and the refusals of the Lenders to grant financing (if any);
6.5.2. to waive the Lenders’ financing offers if, for any reason, they do not satisfy the Customer.
7. Duration of the Agreement
7.1. The Agreement shall enter into force upon signature or upon the acceptance by the other Party to the Agreement by means of the Web-App, or concluded in paper form or to signed with electronical signature and shall remain in force until the Parties have fully performed their obligations.
7.2. The other Party to the Agreement may exercise the right of withdrawal and unilaterally withdraw from the Agreement within 14 (fourteen) days from the date of entry into force of the Agreement by sending an explicit notice of exercise of the right of withdrawal to the Broker's e-mail address (stating name, surname and personal identification number).
7.3. After the expiration of the right of withdrawal, the other Party may unilaterally terminate the Agreement by sending a clear notice of termination to the Broker's e-mail address (stating name, surname and personal identification number).
7.4. The other Party to the Agreement understands and agrees that it will forfeit the right of withdrawal and the right to terminate the Agreement if Broker has provided the Services in accordance with the provisions of the Agreement and the Customer and the Guarantor (if Guarantor is invited) have entered into a loan agreements with Lender.
7.5. Broker may terminate providing the Service if the other Party to the Agreement fails to fulfill the Customer's or Guarantor's obligations under the Agreement (if the Guarantor is involved).
7.6. The Parties agree that the Agreement shall be considered as mutually terminated prematurely if the Customer rejects all financing offers offered to him or receives refusals from all Lenders cooperating with the Broker or in cases specifies in Clauses 6.2.3. and 6.2.4. of the Agreement.
7.7. The Broker shall not apply any Penalties for early termination of the Agreement or using the right of withdrawal.
8. Customer's and Guarantor’s Complaints and Dispute Resolution
8.1. Any Customer's and Guarantor’s complaints shall be submitted to the Broker and reviewed in accordance with the Broker’s Consumer Complaints Procedure (available at www.dmcbonds.com).
8.2. All disputes between the Parties in relation to the Agreement shall be settled by mutual negotiation. If the dispute cannot be resolved by negotiation, it shall be referred to the judicial authorities of the Republic of Latvia. Customer and Guarantor has the opportunity to use out-of-court dispute resolution and legal protection procedures (information available at www.ptac.gov.lv).
9. Other terms
9.1. Any amendments and additions to the Agreement must be in writing and signed by the Parties.
9.2. Communication between the Parties under this Agreement shall be made by sending messages to the e-mail addresses specified in the Agreement or by post. Any notices sent electronically will be deemed received on the next business day after they are sent. Any notices sent by post will be deemed to have been received on the third business day following their dispatch.
9.3. After signing the Agreement, all previous discussions and oral agreements between the Parties in relation to the subject matter of the Agreement shall be null and void.
The information that according to the Cabinet’s Regulations Regarding Consumer Credit No.691 as of October 25, 2016 has to be provided to the Customer free of charge before commencing brokerage services by the Broker, who is offering the Customer a loan secured by mortgage or a loan with the purpose to acquire or retain a right to immovable property
1. Information about the Broker
Name: Akciju sabiedrība “Direct Mortgage Capital”
Registration No: 40103968207
Legal address: Ganību dambis 3/1-8A, Rīga, LV-1045
actual place of provision of the service: Pulkveža Brieža iela 15, 5. stāvs, Rīga, LV-1010
web: www.dmcbonds.com
email: info@dmcbonds.com
2. The Register
The Broker is registered in the Register of Mortgage Intermediaries and Representatives Hereof on February 27, 2019 with the registration number KS – 09. The Register of Mortgage Intermediaries and Representatives Hereof is maintained by the Consumers Rights Protection Centre and is available on the Consumers Rights Protection Centre’s web page www.ptac.gov.lv (section Data bases).
3. Type of cooperation
At the moment of entering into the Agreement the Broker acts as an independent broker.
4. Counseling services
The broker does not offer the Customer a counseling service according to Chapter VII of the Cabinet’s Regulations Regarding Consumer Credit No.691.
5. The Fee for provision the Services
5.1. The Customer pays the Broker a Fee of up to 2% of the amount of the mortgage loan granted to the Customer for the services he provides.
5.2. At the moment of entering into the Agreement the Broker has no agreements with any Lender that provides for a fee or any other payments for the provision of Broker’s services related to loan agreement. If in the course of providing the Services the Broker will enter into such agreements, the Customer shall be accordingly informed and the actual amount of the fee shall be specified the European Standardized Information Sheet provided to the Customer according to the Cabinet’s Regulations Regarding Consumer Credit No.691.
6. Out-of-court dispute resolution procedure
Customer has the opportunity to use out-of-court dispute resolution and legal protection procedures. All disputes are being reviewed by the Consumer Dispute Resolution Commission. Dispute Resolution at the Consumer Dispute Resolution Commission is free of charge for the parties to the dispute. More information on dispute resolution is available on the Consumer Rights Protection Centre website at www.ptac.gov.lv (section Data bases).
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