subject: Credit History Explained [print this page] Credit History Explained Credit History Explained
When it comes to the world of finance and our own personal finance records, there's a lot of terms and jargon that get thrown around that aren't always that easy to interpret. Some of them we need to know, however, because they come up in relation to us and if a bank, building society, prospective employer or governing body (to name just some) wish to perform a credit check on you, it's a good idea to know exactly what that means.
A credit check or report involves the company looking into your credit history and finding out how you deal with and have dealt with your credit the money you borrow and pay back, like when you use a credit card or get a loan. Your credit history is comprised of all of your previous instances of borrowing and repayment, such as your credit cards, mortgages, car and bank loans and so on. Your credit history also includes any open accounts you currently have running, as well as credit card accounts, loans both open and closed, and any loans you have applied for that were rejected. Finally, your credit history includes details on any loans you have defaulted on, any late payments you have made, and any bankruptcies you have filed.
Your credit history is used to determine whether or not you have good credit. Having good credit is important because banks and mortgage companies want evidence that you are more likely to pay back the money, and if you have a good credit history then your report will show that you always make your repayments. If you have poor credit, your report will show that you make late repayments, have defaulted on them or have claimed bankruptcy and so on. If your history involves much of this, banks won't trust you enough to give you a loan and your chances of receiving one are vastly decreased.
Even if you do have poor credit, you don't have to worry too much it's possible to get yourself back into good credit simply by managing your credit well and letting time take its course. Reverse the status of your credit rating by making prompt repayments on credit borrowed, staying under your credit limit and even using a credit building card. If you are new to the world of credit these can all help you get back into a banker's good books! Don't be disheartened, it's possible to get out of bad credit and once you manage it you'll be able to enjoy getting loans and mortgages in future to use wisely!
The author of this article is a part of a digital blogging team who work with brands like Barclaycard. The content contained in this article is for information purposes only and should not be used to make any financial decisions.
