The Importance of avoiding bad credit history
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com 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. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Building Credit History » The Importance of avoiding bad credit history

The Importance of avoiding bad credit history


Updated: December 26, 2012

By
Add to Favorites:
Credit history is perhaps the single most important factor that is taken into account when one applies for a loan. In the past, Banks and other financial agencies used property and asset papers as a guarantee that a person will repay the loan taken. In fact, the amount of the loan sanctioned by the bank is dependant on the market value of the assets. In addition to this, banks also required a salary statement in order to gauge if the individual would be able to repay the loan taken from the salary earned. But with time, the process of lending has become less complicated. These days, most banks, if not all, will run a background check on a person's credit history. The credit history will include very single banking, or finance related transaction made by the person. It also includes notes on the whether the person paid back dues in time etc. The credit History has now replaced the role property papers and such like. Maintaining a good credit History A credit history is like any other. Once written, it cannot be re-written. Maintaining a good credit History is easy if one takes the effort to make payments on time. Late payments are one of the factors that affect credit history. Most often, negligence or procrastination results in late payments. With just a little bit of care, one can ensure that the interest or payment reaches the bank on the day it has to. A bad credit history is not formed in a day. A couple of late payments and irregularities will not completely turn the credit history around. Similarly, a couple of on time payments can do little to salvage an already bad record. Therefore, one needs to be consistently regular to maintain a good record. Credit Histories are recorded and stored online to negate the risk of any Manuel mistakes. Recording credit history on a computer makes it simpler to access and to transfer. At the same time, the recording is automatic. There is no room for personal preferences, apologies and the sort to change the entries. Most people are still discovering the use and expanse of the Credit History. Banks have recently bought into the logic of a nearly faultless method to profile an applicant. The credit Histories are transferred from one bank to another if the need arises. Credit Worthiness When a Bank receives a loan application, it runs a background check on the applicant. This is in addition to the details furnished by the applicant itself. Once the bank receives a record of a person's credit History, the bank will gauge the credit worthiness of the applicant. Credit worthiness refers to how worthy or risk proof an applicant is. This is a particularly important aspect when the loan applied for is a large one. This becomes even more crucial when the applicant does not possess any property of value. Then, in such cases, the only documentation a bank has is the credit history of the person, which should furnish enough details.

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

Related Research:

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: August 9, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading

Amazon Credit Cards Review

By Allison Martin, Posted: May 30, 2016

When Amazon.com was launched 20 years ago, few could have envisioned how far the company would come. What was once an online specialty bookstore is now an Internet juggernaut that sells nearly anything and has made major inroads into ... Continue reading

How Much Do Shell Cards Really Save on Gas?

By Allison Martin, Posted: April 20, 2016

There is an endless amount of gas cards on the market, and practically every major gas station, including Shell, has options to choose from. In fact, Shell offers two options for gas cards for consumers. Continue reading