Tue. Jun 28th, 2022

Your credit history tells about your borrowing behaviour, and it is a mirror of how responsible you are for your debts. It contains the record of your loans, credit cards, and credit accounts; a consolidated record of your every debt, all your credit scores. Credit history plays a massive role in your financial life, and it helps lenders decide whether you’re a reasonable risk.

Good Credit History and its advantages

Good credit history improves your credit history report, bringing you into the good books of credible lenders. Lenders see you as a responsible borrower if you pay dues on time, and your credit report shows you are punctual with payments and pre-payments as well.

A good credit score enables you to save money and make your financial life more manageable. When it comes to acquiring credit loans, the luxury of choice is limited only to those with a favourable credit score. The prospective lenders will regard you as a responsible and trusted borrower if you ensure the timely repayment of dues. A good credit history enables you the privilege of getting the best interest rates. The less money you pay in interest, the faster you pay off the debt. It also helps in faster loan requests and credit applications and proves invaluable in a medical emergency or any unforeseen event. 

Bad Credit History and its implications

Bad credit history portrays you as an irresponsible buyer. Overdue debt, late payment of bills, and other defaults will put you in an undesirable light as a credible buyer in front of potential lenders. For instance, applying for multiple credit cards in a short duration reflects poorly. 

There are several ways in which bad credit impacts one’s life. Due to bad credit history, lenders are less likely to provide a new line of credit as the adverse history is an indicator of negligence to make payments on new loans or credit cards. The chances of getting your credit application denied are usually high if there’s a case of poor credit history. However, sometimes, credit agencies might still decide to approve your application. But you are most likely to receive a higher interest rate than applicants with a good credit history.  Moreover, several employers across companies follow a policy of verifying an applicant’s credit history as part of the formal process. Bad credit history can notably reduce your chances of getting some jobs. In the case of starting your own business, poor credit history is nothing but bad news. No lending company or financial enterprise will consider sanctioning any loans to a person with a bad cibil score. 

Now that you know the considerable role credit can play in your life, you may want to make sure your credit score is as strong as possible, keeping a regular credit report check. At the end of the day, your credit score can impact your life in substantial ways, even though there are only a handful of obvious ways your credit will affect how you live every day. The effects are usually hard to perceive, but that doesn’t mean they don’t matter; take the time to improve and check your credit score by paying all your bills on time and in whole, paying down your debts, and avoiding opening new lines of credit until you’ve mastered what you already have. 

By gnews

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