Factors That Affect Your Credit History

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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 » Factors That Affect Your Credit History

Factors That Affect Your Credit History


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
Credit history is an important report that reflects on an individual's financial credibility. Having a good credit history is very essential in today's world. But, with multiple credit cards and loan systems, high interest rates coupled with economic recession, it is difficult to manage the credits. This gives rise to a low credit score or a bad credit history. There are many aspects of credit cards and loans that need to be taken care of, in order to avoid bad credit history. Some of the important aspects that can lower the credit scores are listed below. Dues, late charges and high outstanding balance: The most important reason for a bad credit history is a missed credit card bill or a payment which is late by more than 30 days. If you have missed a credit card bill payment or failed to pay the minimum balance that is required, it will result in a low score of your credit history. Outstanding balances, late payment charges and higher interest rates for the late payment will reflect upon the credit history. Also, if you have outstanding balance that is higher than 30% of your credit card limit for a long period, that can result in a low credit score. Usually, the outstanding balance should be lesser than 30% of your approved credit limit. Student loans, long term loans: Student loans and other long term loans like housing loans or vehicle loans can also cause bad credit history. It will be sometime before they are considered current and will not affect your credit history Bankruptcy: Filing a bankruptcy if you are unable to pay off the credit can lead to a bad credit history and a very low credit score. Cancellation of credit card accounts and charge offs: Cancelling the credit card accounts and bank accounts especially with an outstanding balance can result in a bad credit history and a low credit score. Credit card companies consider an account as a bad account if they do not receive any payment continuously over a period of time. They suspend the account calling it a charge off and this can result in a bad credit history. New credit card applications and lowered credit limits: Applying for a number of new credit cards and inquiring about the credit cards can lead to a low credit score. Also, if the credit limit on your card is lowered, this will reflect upon your credit history. Inaccuracies by credit report companies: There are companies called credit reporting companies that will generate your credit history. There can be inaccuracies and clerical errors while compiling data related to your credit history. This can also lead to bad credit history, if left unnoticed. Bad credit histories and low credit scores have a number of disadvantages. Because they hold good for 7 to 10 years, it will be difficult to handle any financial crisis within this time. Bad credit history means the chances of obtaining loans and new credit cards from reputed companies are made much more difficult than it already is. It is always a good financial practice to maintain your credit scores high and have a sound credit history. Having a good credit history will make you much more equipped to respond to any financial crisis ahead.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!