The past is not past when it comes to credit history. Of course, you are not defined by your past but creditors look into it to see if you are credit worthy. So even if you make a resolve to change or you pay off your debt today, that’s not the end of that.
When lenders ask you about your credit they are actually referring to your credit history. It shows how you handle your money and if you have been paying off your debts responsibly or not. In fact, your credit report is a summary of your credit history.
The credit history is sourced from the borrowers’ credit card companies, banks, debt collectors, utility companies, government agencies and other relevant sources.
Here are some examples of the things creditors see in your credit history
Number of credit card accounts
While having a number of credit card is not a problem, the fact that you have the ability to max them out means that you can get yourself in too much debt. It is a warning sign that you may not have enough money to pay for another loan. But, if you are paying on time and in full, and you have a good credit score, you’re doing a good job and lenders won’t hesitate to approve your loans.
There is nothing wrong with having debts as long as you are paying them. It’s having too much loans that can ruin your financial health.
Lenders know how to detect that. They calculate your debt load by computing your debt-to-income ratio. You can compute it yourself by simply doing the following steps:
- Add up the amount of payments you make on each debt on a monthly basis
- Divide it by your gross monthly income
- Multiply it by 100
The result is your debt to income ratio.
Timely payment of debts
Your credit history reflects whether you are paying your monthly bills on or before their due dates. Delayed payment could mean that you have been paying late fees and you are struggling to keep up with your monthly bills. But, if you are paying your bills as they arrive, or you automatically pay using your credit card, creditors can see that too.
Is my credit score included in my credit report?
The credit score is based on the borrower’s credit history. But, you have to request for another copy because it is not included in your credit report.
If you have good credit, your credit score is high. But, if you have low scores, it means that you are not handling your finances well.
If you have bad credit, lenders may charge you with high interest rates on loans and credit cards. Utility companies may also ask for deposit first before you can avail of their services.
What should I do if there is a mistake in my credit history?
If you don’t agree with the entries in your credit report, call us. We can help you clean up your credit report by contacting the entity that provided the information to the reporting agency and investigate it. We will also work with your lenders to ensure that these errors won’t happen again.
We strive to give our customers the best service starting from our initial contact with them until your credit file is repaired. Our qualified staff will explain to you the credit repair process, and we will try to answer all your questions.
Contact Clean Credit today!