How to avoid bad credit history


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. 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. 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

The content is accurate at the time of publication and is subject to change.
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.

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!