Your Credit History: A Reflection of Responsibility

September 17, 2016   /   byArs Lexis  / Categories :  Financial Sense

Applying For A LoanIn applying for a loan, one of the things a bank or a lender reviews is your credit history. If you are unaware of what makes up your credit history, then here are three points to sum it up:

  • The number of credit cards in your possession.
  • The number of loans you have at the given time of its evaluation.
  • The timely manner of your repayments.

On Credit History

Rapid Loans, an online alternative loan provider in Australia, advises how your credit history can be enough reason for a lender to deny you a loan. You can explain your situation, though, in case your credit history is not as charming as you would want it to be.

Owning a credit card or loaning from a bank provides your credit history. Companies review and store information regarding your loans and credit cards. This also involves your repayment schedule and how you adhere to it. These details regarding your spending, borrowing and paying figure into your credit history.

A credit report, on the other hand, is a summary of your credit history. It details the following:

  • Personal information such as your name, address, and Social Security number
  • The credit cards you have
  • The loans you have
  • The amount of money you owe
  • If you comply with the schedule of your repayments

Both your credit report and history serve to provide businesses information about your finances and how responsible you are. As a lender, they would, of course, want to know if you are the type of person they can lend money or supply a credit card to. Employers, mobile phone companies and insurance companies are among those that evaluate a client’s credit history.

More than anything else, to these companies, your credit history is a reflection of your responsibility. If you want to improve your credit score, pay your bills on time consistently, avoid closing old accounts, avoid opening new ones and settle all your fines and tickets.