How important is credit history?

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Credit Card Applications » Research » Guides » Building Credit History » How important is credit history?

How important is credit history?


Updated: December 26, 2012

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If you are wondering about the importance of credit history, you have come to the right place. Your credit history dictates how credit companies are going to look at you. Hence, it goes without saying that you should take care to maintain a decent credit history. Listed below are some of the areas where this kind of history comes into play, and will make a difference. You should be familiar with this, so that you don't end up getting a poor credit record affixed to your name.

For loan approval

Your credit history reveals how careful you are with money, and whether or not the banks can expect you to pay the money back within the required time. It follows that, you should check these parameters be sure that you will not be rejected for a loan application, because you didn't have a good credit history.

For credit card approval

If you thought only loans were dependent on your credit records, think again. Even credit cards are handed out to people based on their credit history. Not having a good history, will negatively impact your credit score, which means that you will not have access to some of the best credit cards available; as a result, you will only be be approved for lower end cards with higher APR.

For other kinds of funding

If you are planning to request funds or looking for investors, your credit history will again come into play. If you don't have very good history, it is very likely that you are going to end up spending a considerable amount of time trying to seek funds. This is negative impact is something that you should avoid and immediately address. By taking care of the problem, you will be avoiding a lot of the complications, at a later stage.

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