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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.