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Research: Responsible Payment of Accounts Today Means Creating Impressive Credit History -

Borrowing money is a trend that could enhance the lives of individuals financially. Being approved of a loan, a mortgage or a credit card application is already a privilege in this world and times of economic catastrophe. The best option for a consumer to grab this chance is to bring out his credit worthiness. The capacity to pay for a loan is measured by lending companies including banks and other retails stores through credit history. It is a fact that all financial transactions done by you that are reflected in the records of financial companies will dictate how your condition will be in the future.

Upon your application for credit, the company will secure a copy of your credit report which was prepared by the three reporting agencies. The content of the credit report is based on the information gathered by the bureaus from merchants, landlords and other creditors whom you have made transactions with in the past. Whatever purchases or acts of borrowing you have done and have not settled will be posted until the time you pay for them or you negotiate with your merchant to delete them.

Credit history is the sole basis of your credit scores. The delinquency or promptness in your payment a few years back will be known to your prospective lender. Your scores are made up of several components which the credit reporting agencies use to compute. If your reports don¡¯t show any signs of your willingness to pay your debts regularly and promptly, then the lenders will have an impression that you are not in any way worthy for another big opportunity. Credit scores are divided into three main categories which are payment history, debt to credit limit ratio, length of credit history, types of accounts which are opened under your name and the inquiries you made for new accounts. All these five categories are essential in achieving a score worthy of another credit chance.

You are the maker of your own financial destiny. If you buy something today which you don¡¯t need and which exceeds your credit limit, you break your credit history. If that something you buy cannot be afforded by what you actually earn, then again you create a bad history. Everything now lies in your hand. Financial management is your way out of misery. Use your credit opportunities wisely, be responsible for what you borrowed and open the doors to great financial chances tomorrow.