Credit History

Credit History – Credit Report

 

What is Credit Report?

A complete record of your recent years’ financial status including borrowings, unsecured loans and repayment ability is considered as Credit History or Credit report. Yet another term used to describe the same meaning is credit score. Credit bureau is offered complete details regarding loans and credit card applications made by an individual or business organization. It is credit bureau that makes identification regarding financial and credit information with the existing information. Making available your recent information to credit bureau, you can make it simple for yourself to avail the benefits of receiving credits from banking institutions.

If you dream of a platinum rewards credit card then take care and keep that credit rating up!

Often the question arises whether the information provided is correct or not, thus for clarification even credit bureaus support the fact in positive manner, when it comes to accuracy of data. In case of arguments done through customer regarding accuracy of information, credit bureau is offered 30 days period to sort out the situation through verification. Even after that there is a belief, that it is very much possible for Credit history to have mistakes. Aside from credit report yet another fact that determines the acceptance of credit application is income. Your income plays a vital role when it comes to credit. Though neither is considered as the determining and completely reliable source and thus, after taking both the income and Credit history the bank grant the credit. That is not the only condition when such inquiry is used, even during the period of application made by for extension of repayment, Credit history is given consideration.

Credit Bureau

An organization making thorough efforts to gather financial information from various ways for variety of purposes is credit bureau. Such information is used especially during applications made for lending or credit. It has been the reason of increased importance of credit report. The basic information relates to credits taken in recent years and the time taken during repayment. Such information is thoroughly useful for financial institutions offering loans. The payment capability of an individual is one of the vital factors, when it comes to credit report. Credit bureau makes sure that the customers having clean record in recent past have been offered better ratings and thus, he/she will be charged less rate of interest in comparison to those, who have not been able to create such impressive credit history. There is a certain amount of risk associated with such customers. The information collected makes credit bureau extremely important and thoroughly useful for lenders like banks and other financial institutes.

Data furnishers are the term used for the sources from where credit bureau gathers information. Such information includes both personal and financial information of an individual or business organization along with recent financial transactions. More often or not the sources from where the information is collected are banks, financial institutes, lenders and debt collecting agencies. Mostly these have relationship in recent past with different individuals. Such collected information is then sorted and used to create credit report of various business organizations. Since the amount of data is humongous, mechanical algorithms are used to keep the information in simplest form.

Calculate a Credit Rating

While making application for lending, debtor’s credit worthiness is taken into consideration. Also called as credit rating, it is an essential factor determining chances of approval of your application. Such ratings are made through either rating agency or credit bureau. There are a number of facts that determine credit rating. Instead of any formula credit rating agencies have their own ways of calculating credit rating. The type of information used to determine the ratings may vary with the experience and knowledge of agency. As far as use of credit ratings is concerned, it basically is used by buyers of bonds or shares of public or private companies to know the repayment ability of the company. It is a three digit number and the minimum limit is 300 and maximum is 850. You’re past financial transactions and credit history has great impact over credit rating. This rating is used while judging the loan payment ability and it becomes easier for them to take decision. Your recent payment of bills is among the first few things that lenders look for. Credit utilization is yet another important factor here. Being close to the limit is beneficial for you and it can be made through comparing your credit to the debts you have to pay currently. Longer your credit history is more beneficial it is for you, since maximum information can be found. Each time you apply for loans, an inquiry is added in your credit report, thus make it as low as possible. Last but certainly not the least factor determining credit rating is the variety of accounts you own.

Bad Credit History

Now having a thorough look at what exactly credit history and credit rating is you now need to get acquainted with Bad credit history. Listening the term it will not be difficult for you now to assume the meaning. A bad credit history means you have not been clean, when it comes to payment of credits or debts. Since credit bureaus take everything in records when it comes to your financial activities, it is thoroughly important for you to make sure your credit history is not declared bad. For your convenience, there is no hard and fast rule regarding the period of bad credit history and your recent acts can be made up through current impressive steps.

In order to make sure your credit history remains cleans, it’s vital to pay both online and offline bills on time. Paying credit card is yet another thing you need to take care of after every single month. In order to avoid dreadful situation make sure you have been checking your bank account on a regular basis. Yet another important aspect is holding up the financial agreements. Your failure to perform according to the agreements may result in bad credit history.

Having a thorough look at the mentioned terms, now you must have realized how important it is to maintain your credit.