There are many myths about buying household appliances or electronics on installments. We’ve often heard advice like: “If you buy a phone on installments now and pay it off on time, you’ll build a good credit history in BIK (Credit Information Bureau), and it’ll be easier to get a mortgage later.”
Unfortunately, such statements are not really true. A loan for a phone or household appliance does not improve your score as a potential borrower. However, it’s important to understand that it can hurt your creditworthiness if you fail to pay on time.
Let’s expand on this topic, because this is often how the average borrower’s “adult credit life” begins — sometimes unknowingly. Usually, when you go to an electronics or home appliance store and ask about installment payments, the salesperson redirects you to the installment point.
That point is not part of the store — it’s staffed by representatives of a bank, and it’s with that bank that you’ll sign your loan agreement. So, you’re taking out a bank loan, along with a technical account used to make the payments. The bank representative will assure you that the account is free of charge — it’s just technical — and that all you need to do is make a monthly transfer to that account, from which the installment will be automatically withdrawn.
Life gets busy, and sometimes we forget. We might make the transfer late or send it when we remember. If you miss the payment date, the bank will remind you after a few days, you’ll transfer the money, and you’ll think everything’s fine. Unfortunately — not quite.
By law, the bank is required to report any overdue payments exceeding three days to BIK. Most people never check their BIK report, but BIK doesn’t forget — such information stays on record for at least five years, as long as the account remains closed.
A mortgage analyst reviewing your application may not automatically reject it because of such a delay, but they will note that you’ve had issues with timely payments in the past — which can negatively affect your credit assessment.
And so, what started as a quick purchase in a discount store can end with serious consequences for your future creditworthiness.
