Defaults can lead to negativity and make a consumer's financial life more difficult

Inflation, interest rates, default rates and guarantees are all factors that drive the credit market in Brazil and around the world and have an impact on consumer behavior.

Data from the Central Bank shows that the balance of credit operations in the National Financial System (SFN) will reach R$ 6.4 trillion in 2024, an expansion of 10.9% in the year, with an acceleration in the pace of growth compared to 2023, when the expansion in 12 months reached 8.1%.

The acceleration occurred both in credit to companies (9.1% compared to 4.7% in 2023), totaling R$ 2.48 trillion, and in credit to households (12.1% compared to 10.5% in 2023), totaling R$ 3.95 trillion.

The greater demand for credit is reflected in the greater indebtedness of Brazilians, which can lead to default. A study by the sector registered 73.51 million Brazilians in default in December 2024. Of this total, people aged between 41 and 60 represent the largest share of the population with a restricted name (35.1%).

Credit and the positive register

When a consumer defaults, there are a number of implications for their financial journey, such as restrictions on financing and loans, as well as damaging their credit rating. The lower the credit score, the more lenders perceive there to be a risk in lending money, because the greater the likelihood of the consumer defaulting in the future, which can make it difficult for them to access credit and other services such as new internet, credit and telephone plans.

Defaulting on debts can lead to the consumer being blacklisted by credit bureaus, making them ‘negativado’ or with a “dirty name”, a popular expression that indicates a person who has a record of unpaid debts in credit protection agencies.

While a low credit score can make life difficult for consumers, having a high credit score highlights your financial organization and can open doors to better conditions and terms in credit operations.

With the advent of the positive credit record, the way credit is assessed has changed and become more sophisticated. The databases have expanded with the addition of the consumer's positive notes, i.e. the credit taken out that has been paid back. Today, the credit score shows not just a snapshot of the consumer's financial situation (negative score), but a movie of the consumer's payment history, making it possible to carry out a much more assertive credit analysis.

How to recover credit power

Credit can be considered a tool for well-being. But if you don't plan ahead, you could end up with a headache and end up on the list of defaulters. But if this happens, with a few steps you can regain access to credit.

Here are 6 tips from the National Association of Credit Bureaus (ANBC) to help you maintain a healthy relationship with credit

1 - Settle your debts

Always keep an eye on your debts and settle them whenever possible. You can check the websites and applications of credit bureaus to see if there are any outstanding debts in your name. Contact your creditors, negotiate new payment terms and settle as soon as possible. In the event of late or non-payment, take the initiative and contact your creditor. This demonstrates your willingness to negotiate.

2 - Pay your bills on time

Once you have settled, try to maintain a history of punctual payment. This will be recorded in your payment history and will help to improve or maintain your financial health and credit rating.

3 - Monitor your credit rating

Monitor your credit score as often as possible, identifying possible points for improvement. Each of the bureaus has a specific way of calculating the score, so look for the bureaus' contact centers, websites and apps and find out about your score for free. Your credit score is your passport to credit.

4 - Use credit responsibly

Have you recovered your credit? Now it's time to use it consciously. Try not to get into more debt than you really need. And whenever you choose to take out credit, plan your budget properly and meet the payment deadlines.

5 - Keep your registration details up to date with credit bureaus

Check that your information is correct and up-to-date in the credit bureaus' registers. This can be done quickly through the relationship centers, websites and applications of the bureaus: Equifax | BoaVista, Quod, Serasa Experian, SPC Brasil and TransUnion.

6 - Seek professional help

Depending on the complexity of your finances and the number of commitments, it is important to consider seeking the help of specialized professionals to design strategies for organizing your budget.

Understanding more about personal finance and seeking financial education will help you to improve your financial health and your financial planning, increasing your chances of achieving your goals.

Financial management and education

ANBC was created to represent the credit bureau segment and one of its main objectives is to promote the discipline of credit management and financial education.

Credit bureaus, very important members of this credit dynamic, invest in education for the various audiences in this ecosystem to improve consumer relations, investment and the financial health of Brazilians.