Not everyone is familiar with a credit history check; not knowing that lenders pay close attention to it. Performing a credit history check becomes necessary especially if you are applying for a huge loan amount. Having an excellent credit score means you make payments on time, never miss a payment and you have the capability to pay. Most banks offer interest rate discounts up to 2% to attract customers. Their reason behind it is understandable, better to deal with responsible customers who pay on time rather than customers who cannot afford to pay.
Running Credit History Check
Lenders perform credit history checks to see how an applicant makes his/her payment. Is it always late? Often pays penalty fees? Skips monthly repayment? Your payment attitude reflects. Based on the score, the application will be assessed and those who have poor credit scores may find it difficult to apply. You may have to apply several times before it can be approved. This is bad news if you need the money badly.
Banks run a credit history check especially for secured loans. It is easy to release cash but collecting repayments can give them a head ache. Based on the points accumulated, decision making becomes easier and approval is much faster. Again, your credit history shows your ability to pay. Your score is a number between 0-1000. If you are above 800 then you are a perfect candidate. Having scores lower than that will give you trouble the next time you apply for a loan. Your access to money becomes difficult.
The bad side is, while legit lenders refuse to approve your loan application, you will be forced to borrow cash from loan sharks who charge high interest rates just to obtain money. Worst case scenarios may involve scammers; these scammers will not conduct any credit history check but will force you to make doubtful initial payments. Many have become victim; don’t let this happen to you.
More Accuracy – More Savings
Having a stellar credit score will bring you benefits. Loan applications can be approved in a short span of time, interest rates are lower and there are rewards provided by lenders. Everyone should be aware of their corresponding credit scores. Your credit history allows you to see errors (if there are any) and be able to fix it. Downsides can be avoided by being a responsible borrower. Pay ahead of time to avoid any extra fees that may be charged to you. Keep in mind that your payment attitude affects your credit scores.