The Significance of 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 » The Significance of Credit History

The Significance of Credit History


Updated: December 26, 2012

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

Credit bureaus normally store all the information of an individual or a company's credit score. The credit score is a numerical expression based on the statistics, and the credit history is based on facts such as repaying capabilities, late payments, bankruptcy, etc.

The credit history of an individual or company has a lot of significance, as it is referred to by almost all individuals or organizations in order to get a better perspective of the individual concerned. It could be used by prospective employers, landlords, auto insurance companies, etc. In the United States, a person's credit history is always linked to their social security number. This also reveals the credit or loans that have been availed.

The credit worthiness of a person or a company is based on various criteria, such as the ability to repay debts, the willingness to repay loans and the time taken in case of late payments.

The first step to establish a good credit history is to open a savings or checking account at a financial institution and begin from there. The absence of a savings account or credit history would literally mean no credibility as far as lenders are concerned. Care should be taken to avoid check bounces or overdrafts. Although banks play little or no role in the credit history of an individual, credit card companies tend to scrutinize them thoroughly.

If it is possible, book an apartment or get a telephone connection in your name, but make sure that the bills are paid on time. When moving house one must ensure that all these utility bills are paid and disconnected before vacating the premises.

In the absence of credit history, lenders would be looking at the employment history. If one has a steady job with a steady income then there is some hope with the lenders. However, periodic job changes or a period of being unemployed can negatively impact the creditworthiness of a person.

Store cards should be avoided as much as possible. If one wishes to opt for a store card, then one must ensure that they do not report to the credit bureau.

If you are refused a credit card, then the next best thing is a secured credit card. This would help build a good credit history and this in turn will be reported to the credit bureau.

These are a few tips to help build a credit history and indicate its significance. By building a good credit history one would greatly benefit in the long run.

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:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

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

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... 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!