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Research: Know what gives you bad credit history -

Most of us, at one point or another, have to be involved with a financial institution, be it a bank, a loan provider or a credit card company. These institutions always carefully analyze the credit history of applicants, as it forms a major part of their selection and approval procedure. Financial institutions are known to be wary of customers who have had financial setbacks in the past. Among numerous kinds of financial fallouts, a bad credit history is one of the worst things that can happen to you. It can have far reaching consequences and in adversely affect you in a number of ways, especially if you are in need of a loan or a credit card.

Bad credit history can happen due to a number of different reasons, most of which arise due to the failure of the individual to stick to financial agreements or pre-arranged schedules. These factors combine to give you bad credit history, which has the potential to financially impair you for the rest of your life. To avoid this eventuality, it is essential to know what factors can influence your credit rating, and which actions can contribute towards giving you a bad credit history.

Making Payments on Schedule

The first and foremost factor that features in your credit history is your record with payments. An average person has to make various kinds of payments on a monthly basis. These can comprise of bills, credit card dues, taxes and other forms of payments. While emergencies can happen occasionally, if you are making most of your payments on schedule, you should be in the clear with your credit record. Delaying payments, defaulting on loan repayments and procrastinating in general have a bad effect on your credit record. Likewise, not paying taxes regularly leaves a mark on your credit record, which you may find difficult to repair later. Avoid these, and you can make sure that your credit history remains untarnished and avoid problems at a later time.

Too Much Credit, Too Many Cards

If you ever happen to request too much credit from lenders or banks, or possess too many credit cards, you are taking a blow to your credit record. These factors can give you bad credit history, as they show you in a poor light financially. Financial institutes consider these a liability, and if you want to obtain a loan later on, these factors might harm your chances to a considerable degree.

Watch Those Transfers

With balance transfer accounts proving a popular easy way out, an increasing number of people are opting for it to scrape out of a tough financial situation. While this may prove to be beneficial on a short-term basis, it has repercussions if done too often. It may be viewed as an attempt to hold back payments. A habit of transferring debts too often is sure to show up on your credit record, and likewise causes bad credit history.