How to avoid bad credit history
Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Building Credit History » How to avoid bad credit history

How to avoid bad credit history

Updated: December 26, 2012

Add to Favorites:
A credit history is an account holder`s past ability to repay an amount that has been borrowed. It is of prime importance in financial institutions to keep an individual`s credit record in mind when lending and borrowing money. Having an impaired credit history is called a bad credit history and it is advisable for consumers to stay as far from it as possible. Building a consumers` reputation with a bank, an account holder must avoid bad credit histories particularly if they look at loaning money or funds in the future. Along with the data that includes their past payments, credit histories are used as a point of reference by creditors. The account holders` information is also scrutinised to determine the kind of relationship he/she may share with a lender. An individual having a bad credit history makes a lender rethink his decision of loaning money, and the creditor may get into information like the frequency of low and high balance or if the debt had to be forcefully recovered. Typically, an individual`s bad credit history is ascertained by many factors like account diversity, the debt involved, payment history or if inquiries for new credit had been made. When consumers score low on the credit score and have a poor credit history, it impacts their good will with the creditor too. The kind of debt that has been taken along with the frequency of past defaults goes a long way when lenders consider consumers for loan approvals. Lenders must sure that the amount they lend will be returned without any hassles. It is advisable for an individual who looks at consistent lending and borrowing of money to have as much transparency with debts as possible. This includes paying debts on time and appropriate monthly repayments for debt. Past payments further indicate both the consumers` readiness in repaying a particular debt as well as his overall money handling ability. An adverse credit history along with a person`s income plays an integral role as a loan determinant. However in many cases, even having a very high income in no way shields a person with a bad credit history from action by creditors. A non-credit history shouldn`t mark a consumers account particularly if they have intentions of being approved a loan or amount as credit in the long run. Consumers must keep the efficient handling of both amount credited to them and its repayment right up on their list. What stands out the most is that borrowers must ensure they have a clean track record as far as their credit rating is concerned. It is further essential to assure the creditor or lender of a minimum or no risk involved when they decide to loan an amount. Consumers are also required to make their intentions for loaning a certain fund as clear as possible. This helps the creditor consider the consumer as a potential borrower.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

5 Reasons to Get the Capital One Venture Miles Rewards Card

By Herbert Moore, Posted: January 18, 2017

If you’re looking for a great travel rewards credit card—one that offers unlimited earning opportunities, flexible redemption, and lots of perks—look no further. This card from Capital One has you covered. Continue reading

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading